EXECUTION VERSION
DATED 27 JANUARY 2003
NORTHERN ROCK PLC
as Seller
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
- and -
THE BANK OF NEW YORK
as Security Trustee
________________________________
MORTGAGE SALE AGREEMENT
FOURTH DEED OF AMENDMENT
________________________________
SIDLEY XXXXXX XXXXX & XXXX
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF:30507-15/585584.2
THIS DEED is made on 27 January 2003
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX in its
capacity as Seller and in its capacity as a Beneficiary;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands in its capacity as Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out of
its branch office established in England (registered overseas company
number FC022999 and branch number BR005916) at 0xx Xxxxx, 00 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX in its capacity as a Beneficiary;
and
(4) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX in its
capacity as Security Trustee.
WHEREAS:
(A) The Seller carries on the business (inter alia) of originating mortgage
loans secured on residential properties in England and Wales.
(B) The Seller has assigned to the Mortgages Trustee certain mortgage loans,
together with the benefit of the related security for the same, on the
terms and subject to the conditions set out in the Mortgage Sale
Agreement dated 26 March 2001 among the parties hereto (as amended,
varied, novated or supplemented from time to time, the "MORTGAGE SALE
AGREEMENT").
(C) The parties have agreed to amend and restate the Mortgage Sale Agreement
(the "FIRST AMENDED AND RESTATED MORTGAGE SALE AGREEMENT") pursuant to
the provisions set out in a deed of amendment and restatement dated 23
July 2001 (the "FIRST DEED OF AMENDMENT AND RESTATEMENT").
(D) The parties have agreed to amend and restate the First Amended and
Restated Mortgage Sale Agreement (the "SECOND AMENDED AND RESTATED
MORTGAGE SALE AGREEMENT") pursuant to the provisions set out in a deed of
amendment and restatement dated 28 September 2001 (the "SECOND DEED OF
AMENDMENT AND RESTATEMENT").
(E) The parties have agreed to amend and restate the Second Amended and
Restated Mortgage Sale Agreement (the "THIRD AMENDED AND RESTATED
MORTGAGE SALE AGREEMENT") pursuant to the provisions set out in a deed of
amendment and reinstatement dated 20 March 2002 (the "THIRD DEED OF
AMENDMENT AND RESTATEMENT").
(F) The parties now wish to amend and restate the Third Amended and Restated
Mortgage Sale Agreement.
(G) With effect from the date hereof, the provisions of the Mortgage Sale
Agreement, the First Amended and Restated Mortgage Sale Agreement, the
Second Amended and Restated Mortgage Sale Agreement, the Third Amended
and Restated Mortgage Sale Agreement and this Deed shall be read and
construed as one document.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 The provisions of the Master Definitions Schedule as amended and restated
by (and appearing in Appendix 1 to) the Master Definitions Schedule
Fourth Amendment and Restatement Deed made on 27 January 2003 between,
among others, the parties hereto (as the same have been and may be
amended, varied or supplemented from time to time with the consent of the
parties hereto) are expressly and specifically incorporated into and
shall apply to this Deed.
1.2 The Mortgage Sale Agreement as amended and restated pursuant to the First
Deed of Amendment and Restatement, the Second Deed of Amendment and
Restatement, the Third Deed of Amendment and Restatement and pursuant
hereto shall be referred to herein as the "AMENDED AND RESTATED MORTGAGE
SALE AGREEMENT".
1.3 As used in the Amended and Restated Mortgage Sale Agreement the terms
"MORTGAGE SALE AGREEMENT", "THIS MORTGAGE SALE AGREEMENT", "HEREIN",
"HEREINAFTER", "HEREOF", "HERETO" and other words of similar import shall
mean or refer to the Amended and Restated Mortgage Sale Agreement, unless
the context otherwise specifically requires.
2. AMENDMENTS TO THE THIRD AMENDED AND RESTATED MORTGAGE SALE AGREEMENT
Upon execution of this Deed by the parties hereto, the Third Amended and
Restated Mortgage Sale Agreement shall be and hereby is amended and
restated in the form of Appendix I hereto.
3. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any provision of this Deed or
any provision of the Amended and Restated Mortgage Sale Agreement under
the Contract (Rights of Third Parties) Xxx 0000 but this shall not affect
any right or remedy of a third party which exists or is available apart
from that Act.
4. COUNTERPARTS
This Deed may be executed in any number of counterparts, and has the same
effect as if the signatures and/or seals on the counterparts were on a
single copy of this Deed.
5. GOVERNING LAW
5.1 This Deed is governed by, and shall be construed in accordance with,
English law.
5.2 Each of the parties hereto irrevocably agrees that the courts of England
shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Deed and, for such purposes, irrevocably submits to
the jurisdiction
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of such courts.
3
EXECUTION PAGE
IN WITNESS WHEREOF THIS DEED HAS BEEN EXECUTED AS A DEED AND DELIVERED BY THE
PARTIES HERETO ON THE DAY AND YEAR FIRST ABOVE WRITTEN.
AS SELLER AND AS A BENEFICIARY )
EXECUTED AS A DEED by )
)
as attorney for )
NORTHERN ROCK PLC )
in the presence of: )
Signature of Witness:
Name of Witness:
Occupation:
Address
EXECUTED AS A DEED by )
GRANITE FINANCE TRUSTEES )
LIMITED acting by: )
Name:
Title:
Name:
Title:
4
EXECUTED AS A DEED by )
GRANITE FINANCE )
FUNDING LIMITED )
acting by: )
Name:
Title:
Name:
Title:
EXECUTED AS A DEED by )
THE BANK OF NEW YORK )
acting by: )
Name:
Title:
Name:
Title:
5
APPENDIX 1
AMENDED AND RESTATED MORTGAGE SALE AGREEMENT
6
EXECUTION VERSION
DATED 27 JANUARY 2003
_____________________
NORTHERN ROCK PLC
as Seller
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
- and -
THE BANK OF NEW YORK
as Security Trustee
_________________________________________________________________
FOURTH AMENDED
MORTGAGE SALE AGREEMENT
_________________________________________________________________
SIDLEY XXXXXX XXXXX & XXXX
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF:585646.2
CONTENTS
CLAUSE PAGE NO.
1. Definitions and Construction............................................4
2. Sale and Purchase of Initial Mortgage Portfolio.........................5
3. Initial Closing Date....................................................5
4. Sale and Purchase of New Mortgage Portfolios............................7
5. Trust of Monies........................................................13
6. Perfection of the Assignment...........................................15
7. Undertakings...........................................................17
8. Warranties and Repurchase by the Seller................................20
9. Further Assurance......................................................26
10. Consequences of Breach.................................................26
11. Subordination..........................................................26
12. Non-Merger.............................................................26
13. No Agency or Partnership...............................................27
14. Payments...............................................................27
15. Assignment.............................................................27
16. Security Trustee.......................................................27
17. New Intercompany Loans.................................................28
18. Non Petition Covenant; Limited Recourse................................28
19. Amendments and Waiver..................................................29
20. Notices................................................................30
21. Third Party Rights.....................................................30
22. Execution in Counterparts; Severability................................30
23. Governing Law and Submission to Jurisdiction...........................31
24. Process Agent..........................................................31
25. Appropriate Forum......................................................31
26. Transaction Documents..................................................31
2
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES....................................32
SCHEDULE 2 FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND..............40
SCHEDULE 3 ASSIGNMENT OF INSURANCE CONTRACTS.................................45
SCHEDULE 4 INSURANCE CONTRACTS...............................................47
SCHEDULE 5 ASSIGNMENT OF GUARANTEES..........................................48
SCHEDULE 6 NEW MORTGAGE PORTFOLIO NOTICE.....................................50
SCHEDULE 7 LOAN REPURCHASE NOTICE............................................53
SCHEDULE 8 FORM OF NOTIFICATION TO BORROWERS.................................55
SCHEDULE 9 OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE
MORTGAGE LOANS)........................................................56
SCHEDULE 10..................................................................57
POWER OF ATTORNEY IN FAVOUR OF THE MORTGAGES TRUSTEE,
FUNDING AND THE SECURITY TRUSTEE.......................................57
SCHEDULE 11..................................................................60
LENDING CRITERIA.......................................................60
SCHEDULE 12..................................................................63
STANDARD DOCUMENTATION.................................................63
APPENDIX A
THE INITIAL MORTGAGE LOAN PORTFOLIO....................................65
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THIS FOURTH AMENDED MORTGAGE SALE AGREEMENT DATED 27 JANUARY 2003 FURTHER
AMENDS AND RESTATES THE MORTGAGE SALE AGREEMENT DATED 26 MARCH 2001 BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX in its
capacity as Seller and in its capacity as a Beneficiary;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands in its capacity as the Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out of
its branch office established in England (registered overseas company
number FC022999 and branch number BR005916) at 0xx Xxxxx, 00 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX in its capacity as a Beneficiary;
and
(4) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX in its
capacity as Security Trustee.
WHEREAS:
(A) The Seller carries on the business (inter alia) of originating mortgage
loans secured on residential properties in England and Wales.
(B) The Seller has agreed to assign to the Mortgages Trustee certain mortgage
loans, together with the benefit of the related security for the same, on
the terms and subject to, the conditions set out in this Mortgage Sale
Agreement (the "AGREEMENT").
(C) The Mortgages Trustee has agreed to hold certain of the above mentioned
mortgage loans as bare trustee for the Beneficiaries upon, with and
subject to the trusts, powers and provisions of the Mortgages Trust Deed.
IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND CONSTRUCTION
1.1. The provisions of the Master Definitions Schedule as amended and restated
by (and appearing in Appendix 1 to) the Master Definitions Schedule
Fourth Amendment and Restatement Deed made on 27 January 2003 between,
among others, the Seller, Funding and the Mortgages Trustee (as the same
have been and may be amended, varied or supplemented from time to time
with the consent of the parties hereto) are expressly and specifically
incorporated into and shall apply to this Agreement.
4
2. SALE AND PURCHASE OF INITIAL MORTGAGE PORTFOLIO
2.1 AGREEMENT TO ASSIGN: Subject to Clause 2.2 (Conditions), in consideration
of the Purchase Price for the Initial Mortgage Portfolio (which shall be
paid in accordance with Clause 3.3 (Effect of Payment of Initial Purchase
Price)) and the covenant of the Mortgages Trustee to hold the Trust
Property upon trust for the Seller and Funding as beneficiaries of the
Mortgages Trust upon, with and subject to all the trusts, powers and
provisions of the Mortgages Trust Deed and the Mortgages Trustee's
agreement in Clause 3.5 (Early Repayment Charges) to pay to the Seller
any and all Early Repayment Charge Receipts, the Seller hereby agrees to
assign the Initial Mortgage Portfolio to the Mortgages Trustee on the
Initial Closing Date with full title guarantee.
2.2 CONDITIONS: The obligation of the Seller under Clause 2.1 (Agreement to
Assign) shall be subject to and conditional upon:
(a) the issue by the First Issuer of the Notes on the Initial Closing
Date and the borrowing by Funding of the amount provided for under
the First Issuer Intercompany Loan Agreement;
(b) the constitution of the Mortgages Trust on or prior to the Initial
Closing Date;
(c) the Transaction Documents having been executed and delivered by
the parties thereto on or before the Initial Closing Date or, in
the case of any Transaction Documents which are to be executed
immediately after the Initial Closing Date, the same having been
executed and being available for delivery and none of the parties
knowing of any reason why the same should not be delivered
immediately thereafter;
(d) the payment of the Initial Contribution by Funding to the
Mortgages Trustee in accordance with the terms of the Mortgages
Trust Deed; and
2.3 the payment of the Initial Purchase Price by the Mortgages Trustee to the
Seller in accordance with paragraph (a) of Clause 3.2 (Purchase Price).
3. INITIAL CLOSING DATE
3.1 INITIAL CLOSING AND CONDITIONS PRECEDENT: A meeting shall take place on
the Initial Closing Date at the offices of Xxxxx & Xxxx, 0 Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxx, Xxxxxx XX0X 0XX, or such offices as the parties
may agree, at which the Seller shall deliver to the Security Trustee
(upon request), Funding and the Mortgages Trustee or the representative
of such party (or procure such delivery to such party of) the following
documents:
(a) an original power of attorney in the form set out in Schedule 10
(Power of Attorney in favour of the Mortgages Trustee, Funding and
the Security Trustee) duly executed by the Seller;
(b) a certificate of solvency in relation to the Seller dated as at
the Initial Closing Date (in the form of the agreed draft) duly
executed by the Seller;
5
(c) a list of the Mortgage Loans in the Initial Mortgage Portfolio;
(d) an assignment of the Insurance Contracts to the extent that such
Insurance Contracts relate to the Initial Mortgage Portfolio in
the form set out in Schedule 3 (Assignment of Insurance Contracts)
duly executed by the Seller; and
(e) a certified copy of the board minutes of the securitisation sub-
committee of the Seller authorising its duly appointed
representatives to agree the sale and assignment of the Initial
Mortgage Portfolio and authorising the execution and performance
of this Agreement, the Mortgages Trust Deed, the Administration
Agreement, the other Transaction Documents and all of the
documentation to be entered into pursuant to the Transaction
Documents.
3.2 PURCHASE PRICE: Subject to fulfilment of the conditions referred to in
paragraphs (a) to (and including) (d) of Clause 2.2 (Conditions) and
Clause 3.1 (Initial Closing and Conditions Precedent), the Mortgages
Trustee shall pay the Purchase Price for the Initial Mortgage Portfolio
to the Seller, in the manner that the Seller directs, for value, as
follows:
(a) the Initial Purchase Price for the Initial Mortgage Portfolio
shall be paid by the Mortgages Trustee to the Seller on the
Initial Closing Date (which Initial Purchase Price shall be paid
by the Mortgages Trustee from funds received by the Mortgages
Trustee from Funding on such date in respect of Funding's Initial
Contribution for the Funding Share of the Closing Trust Property
pursuant to the Mortgages Trust Deed);
(b) subject to and in accordance with the Mortgages Trustee Revenue
Priority of Payments, an amount of Deferred Purchase Price in
respect of the Mortgage Portfolio shall be paid by the Mortgages
Trustee to the Seller on each Distribution Date but only from and
to the extent (if any) of any Relevant Distribution (as defined
under paragraph (b) of Clause 4.2 (Consideration provided by
Funding) of the Mortgages Trust Deed) available for payment on
such date and in an amount equal to the Deferred Contribution for
the Funding Share of the Trust Property paid by Funding to the
Mortgages Trustee on such date or in respect of which the payment
of such Deferred Contribution is otherwise satisfied on such date
in accordance with the Mortgages Trust Deed; and
(c) a final amount of Deferred Purchase Price in respect of the
Mortgage Portfolio shall be paid by the Mortgages Trustee to the
Seller following the receipt by the Mortgages Trustee from Funding
of any Final Deferred Contribution, which payment shall be in an
amount equal to such Final Deferred Contribution for the Funding
Share of the Trust Property paid by Funding to the Mortgages
Trustee or in respect of which the payment of such Final Deferred
Contribution is otherwise satisfied in accordance with the
Mortgages Trust Deed.
3.3 EFFECT OF PAYMENT OF INITIAL PURCHASE PRICE: The parties hereto
acknowledge that the effect of the payment to the Seller by the Mortgages
Trustee of the Initial Purchase Price on the Initial Closing Date will be
the assignment to the Mortgages Trustee of the beneficial
6
ownership of, and all of the Seller's beneficial right, title, interest
and benefit in and to, the Initial Mortgage Portfolio subject to the
terms and provisions of the Mortgages Trust Deed, which assignment will
be perfected upon the occurrence of any of the events set forth in Clause
6 (Perfection of the Assignment) and the transfer to the Mortgages
Trustee of legal title to the Initial Mortgage Portfolio in accordance
with Clause 6 (Perfection of the Assignment).
3.4 DOCUMENTS: The Seller undertakes that from the Initial Closing Date
until the perfection of the assignment in accordance with Clause 6.1
(Perfection Events) and delivery of the Title Deeds in accordance with
Clause 6.2 (Perfection), the Seller shall hold the deeds and documents
constituting the Title Deeds and Mortgage Loan Files and all other
certificates, notices, policies, endorsements and other matters necessary
to establish title thereto relating to the Mortgage Portfolio that are in
its possession or under its control or held to its order to the order of
the Mortgages Trustee or the Security Trustee or as the Mortgages Trustee
or the Security Trustee shall direct.
3.5 EARLY REPAYMENT CHARGES: The Mortgages Trustee hereby agrees to pay to
the Seller as part of the Deferred Purchase Price any and all Early
Repayment Charge Receipts received by the Mortgages Trustee in respect of
the Mortgage Loans included in the Initial Mortgage Portfolio PROVIDED
THAT, if any Mortgage Loans in respect of which Early Repayment Charges
are payable are the subject of a trust pursuant to Clause 5.1 (Trust in
favour of Mortgages Trustee), the Seller, the Mortgages Trustee, Funding
and the Security Trustee agree that the benefit of any Early Repayment
Charges payable under such Mortgage Loan shall, on the date of payment to
the Seller of the related Early Repayment Charge Receipts, be released
from such trust.
3.6 INSURANCE: The Seller shall as soon as reasonably practical after the
sale and assignment of the Initial Mortgage Portfolio on the Initial
Closing Date procure that the respective interests of the Mortgages
Trustee, Funding and the Security Trustee are noted by the relevant
insurers in relation to each Insurance Contract.
4. SALE AND PURCHASE OF NEW MORTGAGE PORTFOLIOS
4.1 AGREEMENT TO ASSIGN: Subject to fulfilment of the conditions set out in
Clauses 2.2 (Conditions), 3.1 (Initial Closing and Conditions Precedent),
4.2 (Conditions to Effecting an Assignment of New Mortgage Loans) and 4.3
(No Further Assignment), in consideration of either:
(a) the Purchase Price, if any is payable (which if it is payable
shall be paid in accordance with Clause 4.5 (Purchase Price)), for
the New Mortgage Portfolio and the covenant by the Mortgages
Trustee to hold the Trust Property upon trust for the Seller and
Funding as beneficiaries of the Mortgages Trust, upon, and with
and subject to the trusts, powers and provisions of the Mortgages
Trust Deed; or
7
(b) the covenant by the Mortgages Trustee to hold the Trust Property
upon trust for the Seller and Funding as beneficiaries of the
Mortgages Trust upon, and with and subject to the trusts, powers
and provisions of the Mortgages Trust Deed,
and (in either case) the Mortgages Trustee's agreement in Clause 4.8
(Early Repayment Charges) to pay to the Seller any and all Early
Repayment Charge Receipts, if the Seller shall at any time and from time
to time serve a properly completed New Mortgage Portfolio Notice as set
out in Schedule 6 (New Mortgage Portfolio Notice) on the Mortgages
Trustee and Funding with a copy (upon request) to the Security Trustee
(such service to be in the Seller's sole discretion), then on the
Assignment Date specified in the New Mortgage Portfolio Notice the Seller
agrees that it shall assign to the Mortgages Trustee the relevant New
Mortgage Portfolio with full title guarantee, PROVIDED THAT (a) the
Seller hereby covenants that it will not assign New Mortgage Loans to the
Mortgages Trustee during any Trust Calculation Period prior to the
Distribution Date in such Trust Calculation Period, and (b) the Seller
hereby agrees that it is only permitted to make one assignment of New
Mortgage Loans to the Mortgages Trustee during any Trust Calculation
Period.
4.2 CONDITIONS TO EFFECTING AN ASSIGNMENT OF NEW MORTGAGE LOANS: The
conditions to be met as at each Assignment Date in order to effect an
assignment of New Mortgage Loans are:
(a) the aggregate Arrears of Interest in respect of all of the
Mortgage Loans in the Mortgages Trust, as a percentage of the
aggregate gross interest due during the previous 12 months on all
Mortgage Loans outstanding during all or part of such period, does
not exceed 2 per cent., or such other percentage as agreed to by
the Rating Agencies on such Assignment Date. "ARREARS OF INTEREST"
for this purpose in respect of a Mortgage Loan on any date means
the aggregate amount overdue on the Mortgage Loan on that date,
but only where such aggregate amount overdue equals or exceeds an
amount equal to the Monthly Payment then due on the Mortgage Loan
and such amount has been overdue for an entire calendar month;
(b) the long term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller are rated no lower than A3 by Xxxxx'x
and A- by Fitch at the time of, and immediately following, the
assignment of the New Mortgage Loans to the Mortgages Trustee;
(c) on the relevant Assignment Date, the aggregate Current Balance of
the Mortgage Loans in the Mortgages Trust, in respect of which the
aggregate amount is then in arrears for at least 3 months, is less
than 4 per cent. of the aggregate Current Balance of all Mortgage
Loans in the Mortgages Trust on such Assignment Date, unless the
Rating Agencies have confirmed that the then current ratings of
the Notes will not be adversely affected;
(d) the Lending Criteria applicable at the time of origination of each
relevant New Mortgage Loan have been applied to the New Mortgage
Loan and to the circumstances of the Borrower at the time the New
Mortgage Loan was made,
8
provided that material variations from such Lending Criteria may
occur so long as the Rating Agencies have been notified of any
such material variations;
(e) no New Mortgage Loan has on the relevant Assignment Date an
aggregate amount in arrears which is greater than the amount of
the Monthly Payment then due;
(f) the Rating Agencies have not provided written confirmation to the
Mortgages Trustee, the Security Trustee and the Issuer that the
assignment to the Mortgages Trustee of the New Mortgage Loans on
the Assignment Date will adversely affect the then current ratings
of the existing Notes of any Issuer (provided that, in respect of
the assignment by the Seller to the Mortgages Trustee of a New
Mortgage Portfolio in connection with the issuance by a New Issuer
of New Notes and the drawing by Funding of a New Intercompany
Loan, the condition to be met at the relevant Assignment Date of
such New Mortgage Portfolio will be that the Rating Agencies have
confirmed in writing to the Mortgages Trustee, the Security
Trustee and the Issuer that the assignment to the Mortgages
Trustee of the New Mortgage Portfolio on such Assignment Date will
not adversely affect the then current ratings of the existing
Notes of any Issuer);
(g) the aggregate Current Balance of New Mortgage Loans transferred in
any one Interest Period does not exceed 10 per cent. of the
aggregate Current Balance of Mortgage Loans in the Mortgages Trust
as at the beginning of that Interest Period;
(h) each Issuer Reserve Fund is fully funded on the relevant
Assignment Date up to the relevant required amount or, if any
Issuer Reserve Fund is not so fully funded, no payments have been
made from such Issuer Reserve Fund;
(i) no Intercompany Loan Enforcement Notice has been served in respect
of any Intercompany Loan;
(j) the assignment of the New Mortgage Portfolio on the relevant
Assignment Date does not result in the product of WAFF and WALS
for the Mortgage Portfolio after such purchase, calculated on the
relevant Assignment Date in the same way as for the Initial
Mortgage Portfolio (or as agreed by the Administrator and the
Rating Agencies from time to time), exceeding the product of WAFF
and WALS for the Mortgage Portfolio calculated on the most recent
preceding Closing Date plus 0.35 per cent.;
(k) to the extent necessary, each Issuer has entered into appropriate
hedging arrangements in respect of such New Mortgage Loans before
such Mortgage Loans are assigned to the Mortgage Trust;
(l) no event of default under the Transaction Documents has occurred
which is continuing as at the relevant Assignment Date;
(m) the weighted average yield on the Mortgage Portfolio together with
the New Mortgage Portfolio to be assigned to the Mortgages Trustee
on the relevant Assignment Date is not less than LIBOR for three-
month sterling deposits plus 0.6
9
per cent., taking into account the weighted average yield on the
Mortgage Loans and the margins on any Basis Rate Swaps as at the
relevant Assignment Date;
(n) the assignment of the New Mortgage Portfolio on the relevant
Assignment Date does not result in the weighted average loan to
value ratio of Mortgage Loans in the Mortgage Portfolio on the
relevant Assignment Date (after the purchase of the New Mortgage
Portfolio) after application of the LTV Test on the relevant
Assignment Date exceeding the loan to value ratio (based on the
LTV Test) of Mortgage Loans in the Mortgage Portfolio on the most
recent preceding Closing Date plus 0.25 per cent.;
(o) no New Mortgage Loan has a maturity date on or after January 2039;
(p) the related Borrower under each New Mortgage Loan has made at
least one Monthly Payment;
(q) for so long as any Notes issued by any Issuer that have a Final
Repayment Date earlier than January 2041 are outstanding, the
assignment of New Mortgage Loans to the Mortgages Trustee may only
occur if, following such assignment, the aggregate number of
Repayment Mortgage Loans in the Mortgage Portfolio is greater than
or equal to 25 per cent. of the aggregate number of Mortgage Loans
in the Mortgage Portfolio;
(r) the Rating Agencies have provided written confirmation that the
then current ratings on the Notes would not be adversely affected
by the assignment to the Mortgages Trustee of a New Mortgage Loan
in respect of a mortgage loan product having characteristics
and/or features that differ materially from the characteristics
and/or features of the Mortgage Loans in the Initial Mortgage
Portfolio;
(s) the Seller shall as at the relevant Assignment Date make the
Representations and Warranties to the Mortgages Trustee, Funding
and the Security Trustee in relation to each New Mortgage Loan in
the New Mortgage Portfolio being sold on the relevant Assignment
Date in accordance with Clause 8 (Warranties and Repurchase by the
Seller) and such Representations and Warranties must be true in
relation to each New Mortgage Loan (but if such Representation and
Warranties are only discovered to be untrue after the relevant
Assignment Date, the Mortgages Trustee's only remedy shall be
under Clause 7 (Undertakings); and
(t) following the purchase by the Mortgages Trust of any New Mortgage
Portfolio, the aggregate Current Balance of Mortgage Loans in the
Mortgages Trust that are subject to a maximum rate of interest and
which charge interest at the lesser of the Seller's Standard
Variable Rate and the maximum rate of interest (as specified in
the relevant Mortgage Conditions) (the "CAPPED RATE MORTGAGE
LOANS") will not exceed 10 per. cent of the aggregate Current
Balance of all Mortgage Loans in the Mortgages Trust (including
such Capped Rate Mortgage Loans) as of such Assignment Date,
10
PROVIDED THAT, if an Initial Purchase Price is payable to the Seller by
the Mortgages Trustee on the relevant Assignment Date, only the
conditions set out in paragraphs (e), (f), (i), (k), (l), (m), (o), (p),
(q), (r) and (s) are required to be satisfied to effect an assignment of
the New Mortgage Loans.
Notwithstanding the foregoing, the Mortgages Trustee may waive or vary
any of the conditions set forth in this Clause 4.2 subject to written
approval by the Rating Agencies.
In this Clause 4.2 references to any Monthly Payment due at any date
means the Monthly Payment payable in respect of the month in which that
date falls.
4.3 NO FURTHER ASSIGNMENT: The Seller and the Mortgages Trustee agree that
the Seller may not assign any New Mortgage Portfolio after the Step-up
Date in respect of the Notes of any Issuer if the option to redeem any
such Notes on the related Step-up Date pursuant to Condition 5(D) of
those Notes is not exercised.
4.4 CLOSING AND CONDITIONS PRECEDENT: A meeting shall take place on the date
of the assignment of the relevant New Mortgage Portfolio at the offices
of the Seller or at such other office as may be agreed by the parties at
which the Seller shall deliver to the Security Trustee or its
representative the following documents:
(a) a certificate of solvency in relation to the Seller dated the
relevant Assignment Date (in the form of the agreed draft) duly
executed by the Seller;
(b) an assignment of the Insurance Contracts to the extent that such
Insurance Contracts relate to the New Mortgage Portfolio in the
form set out in Schedule 3 (Assignment of Insurance Contracts)
duly executed by the Seller; and
(c) a certificate of a duly authorised officer of the Seller attaching
a copy of the board minutes referred to in paragraph (e) of Clause
3.1 (Initial Closing and Conditions Precedent) and confirming that
the resolutions referred to therein are in full force and effect
and have not been amended or rescinded as at the date of the
certificate.
4.5 PURCHASE PRICE: Subject to fulfilment of the conditions referred to in
Clauses 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans), 4.3 (No Further Assignment) and 4.4 (Closing and Conditions
Precedent), the Mortgages Trustee shall, if and to the extent that the
same is payable, pay the Purchase Price for the New Mortgage Portfolio to
the Seller, in the manner that the Seller directs, for value, as follows:
(a) (if any Initial Purchase Price is payable in respect of the New
Mortgage Portfolio which shall only be the case if an Initial
Contribution is paid by Funding to the Mortgages Trustee on such
date pursuant to the terms of the Mortgages Trust Deed) the
Initial Purchase Price for the New Mortgage Portfolio shall be
paid by the Mortgages Trustee to the Seller on the relevant
Assignment Date (which Initial Purchase Price shall be paid by the
Mortgages Trustee from funds received by the Mortgages Trustee
from Funding on such date in respect of Funding's Initial
Contribution for the Funding Share of the New Trust Property
pursuant to the
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Mortgages Trust Deed), PROVIDED THAT if on any date the Seller is
obliged to repurchase any Mortgage Loan or Mortgage Loans pursuant
to Clause 8.4 (Repurchase), 8.5 (Repurchase of Product Switches
and Further Advances) or 8.6 (Repurchase of Fixed Rate Mortgage
Loans), and on such date the Seller assigns New Mortgage Loans and
their Related Security to the Mortgages Trustee, the Seller is
entitled to set-off against the repurchase price payable by it on
such repurchase as set forth under Clause 8.7 (Completion of
Repurchase) the amount of any Initial Purchase Price payable for
any such New Mortgage Loans and shall instead pay (or be paid)
such net amount; and
(b) subject to and in accordance with the Mortgages Trustee Revenue
Priority of Payments, an amount of Deferred Purchase Price in
respect of the Mortgage Portfolio shall be paid by the Mortgages
Trustee to the Seller on each Distribution Date but only from and
to the extent (if any) of any Relevant Distribution (as defined
under paragraph (b) of Clause 4.2 (Consideration provided by
Funding) of the Mortgages Trust Deed) available for payment on
such date and in an amount equal to the Deferred Contribution for
the Funding Share of the Trust Property paid by Funding to the
Mortgages Trustee on such date or in respect of which the payment
of such Deferred Contribution is otherwise satisfied on such date
in accordance with the Mortgages Trust Deed.
4.6 EFFECT OF PAYMENT OF INITIAL PURCHASE PRICE OR FULFILMENT OF CONDITIONS:
The parties hereto acknowledge that the effect of either the payment to
the Seller by the Mortgages Trustee of the Initial Purchase Price on the
relevant Assignment Date or, if no Initial Purchase Price is payable on
such date, the confirmation from the Seller of the fulfilment of the
conditions referred to in Clauses 4.2 (Conditions to Effecting an
Assignment of New Mortgage Loans) and the delivery to the Security
Trustee of the documents referred to in Clause 4.4 (Closing and
Conditions Precedent) on such date, will be the assignment to the
Mortgages Trustee of the beneficial ownership of, and all of the Seller's
beneficial right, title, interest and benefit in and to, the New Mortgage
Portfolio subject to the terms and provisions of the Mortgages Trust
Deed, which assignment will be perfected upon the occurrence of any of
the events set forth in Clause 6 (Perfection of the Assignment) and the
transfer to the Mortgages Trustee of legal title to such New Mortgage
Portfolio in accordance with Clause 6 (Perfection of the Assignment).
4.7 DOCUMENTS: The Seller undertakes that from the relevant Assignment Date
until the perfection of the assignment in accordance with Clause 6.1
(Perfection Events) and the delivery of the Title Deeds in accordance
with Clause 6.2 (Perfection), the Seller shall hold the deeds and
documents constituting the Title Deeds and Mortgage Loan Files and all
other certificates, notices, policies, endorsements and other matters
necessary to establish title thereto relating to the Mortgage Portfolio
that are in its possession or under its control or held to its order to
the order of the Mortgages Trustee or as the Mortgages Trustee shall
direct.
4.8 EARLY REPAYMENT CHARGES: The Mortgages Trustee hereby agrees to pay to
the Seller as part of the Deferred Purchase Price any and all Early
Repayment Charge Receipts received by the Mortgages Trustee in respect of
the Mortgage Loans included in the New Mortgage Portfolio
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PROVIDED THAT, if any Mortgage Loans in respect of which Early Repayment
Charges are payable are the subject of a trust pursuant to Clause 5.1
(Trust in favour of Mortgages Trustee), the Seller, the Mortgages
Trustee, Funding and the Security Trustee agree that the benefit of any
Early Repayment Charges payable under such Mortgage Loan shall, on the
date of payment to the Seller of the related Early Repayment Charge
Receipts, be released from such trust.
4.9 INSURANCE: The Seller shall as soon as reasonably practical after
completion of the assignment of each New Mortgage Portfolio procure that
the respective interests of the Mortgages Trustee, Funding and the
Security Trustee are noted by the relevant insurers in relation to each
Insurance Contract.
4.10 MORTGAGE PORTFOLIO: Prior to the earlier to occur of:
(a) a Trigger Event; and
(b) (i) if Funding does not enter into a New Intercompany Loan
Agreement, the Payment Date in January 2008; or
(ii) if Funding does enter into New Intercompany Loan Agreements,
the latest Payment Date specified by Funding by notice in
writing to the Seller and the Mortgages Trustee as applying
in relation to this covenant,
the Seller undertakes to use all reasonable efforts to offer to
assign, in accordance with the provisions of this Clause 4 (Sale
and Purchase of New Mortgage Portfolios), to the Mortgages Trustee
and the Mortgages Trustee undertakes to use all reasonable
endeavours to acquire from the Seller and to hold pursuant to the
terms of the Mortgages Trust Deed, sufficient New Mortgage Loans
and their Related Security so that the Overcollateralisation Test
is not breached on three consecutive Distribution Dates PROVIDED
THAT the Seller shall not be obliged to assign to the Mortgages
Trustee, and the Mortgages Trustee shall not be obliged to
acquire, New Mortgage Loans and their Related Security if in the
opinion of the Seller the assignment to the Mortgages Trustee of
New Mortgage Loans and their Related Security would adversely
affect the business of the Seller.
For the purposes of this Clause 4.10, the "OVERCOLLATERALISATION TEST"
shall be calculated on each Distribution Date and shall be breached on
any Distribution Date where the aggregate Current Balance of Mortgage
Loans in the Mortgage Portfolio on such Distribution Date is less than an
amount equal to the product of 1.10 and the Principal Amount Outstanding
of all Notes of all Issuers at such Distribution Date, and for this
purpose, where such Notes outstanding are Controlled Amortisation Notes,
the Principal Amount Outstanding of such Notes will be calculated on a
straight-line basis by applying the appropriate CPR to such Notes on a
monthly, rather than a quarterly basis.
5. TRUST OF MONIES
5.1 TRUST IN FAVOUR OF MORTGAGES TRUSTEE: Notwithstanding the assignment
effected by this
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Agreement if at, or at any other time after, the Initial Closing Date or,
as the case may be in respect of any New Mortgage Portfolio, the relevant
Assignment Date (but prior to any repurchase in accordance with Clause
8.5 (Repurchase of Product Switches and Further Advances)) the Seller
holds, or there is held to its order, or it receives, or there is
received to its order any property, interest, right or benefit and/or the
proceeds thereof hereby agreed to be sold to the Mortgages Trustee, the
Seller undertakes with the Mortgages Trustee, Funding and the Security
Trustee that it will hold such property, interest, right or benefit
and/or the proceeds thereof upon trust for the Mortgages Trustee subject
at all times to the Mortgages Trust. In addition, if for any reason the
assignment of the Initial Mortgage Portfolio, or any New Mortgage
Portfolio (or any part thereof), or any property, interest, right or
benefit therein or any of the proceeds thereof (each a "RELEVANT ASSET"),
is held to be ineffective or unenforceable against any Borrower, the
Seller undertakes with the Mortgages Trustee, Funding and the Security
Trustee and hereby declares that it will hold such relevant asset upon
trust for the Mortgages Trustee. The Mortgages Trustee agrees that it
will hold its beneficial interest in such relevant asset subject at all
times to the Mortgages Trust.
5.2 TRUST IN FAVOUR OF SELLER: If at, or any time after, the Initial Closing
Date or, as the case may be in respect of any New Mortgage Portfolio, the
relevant Assignment Date, the Mortgages Trustee holds, or there is held
to its order, or it receives, or there is received to its order, any
property, interest, right or benefit relating to:
(a) any Mortgage Loan or Mortgage Loans under a Mortgage Account and
its Related Security repurchased by the Seller pursuant to Clause
8 (Warranties and Repurchase by the Seller); or
(b) (without prejudice to Clause 10 (Consequences of Breach)) any
Early Repayment Charges payable by a Borrower in respect of any
Mortgage Loan in the Mortgages Trust;
and/or the proceeds thereof, the Mortgages Trustee undertakes with the
Seller that it will remit, assign or transfer the same to the Seller, as
the case may require, and until it does so or to the extent that the
Mortgages Trustee is unable to effect such remittance, assignment or
transfer, the Mortgages Trustee undertakes to hold such property,
interest, right or benefit and/or the proceeds thereof upon trust for the
Seller as the sole beneficial owner thereof or as the Seller may direct
provided that the Mortgages Trustee shall not be in breach of its
obligations under this Clause 5 if, having received any such moneys and
paid them to third parties in error, it pays (at the direction of the
Beneficiaries) to the Seller an amount equal to the moneys so paid in
error in accordance with the Administration Agreement. In addition, if
the Seller is required or elects to repurchase any Mortgage Loan and its
Related Security pursuant to Clauses 8.4 (Repurchase), 8.5 (Repurchase of
Product Switches and Further Advances) or 8.6 (Repurchase of Fixed Rate
Mortgage Loans) and such Mortgage Loan or its Related Security, or any
part thereof, or any property, interest, right or benefit therein or any
of the proceeds thereof (each, a "RELEVANT ASSET"), is held by the Seller
subject to a trust pursuant to Clause 5.1 (Trust in favour of Mortgages
Trustee), then the Seller, the Mortgages Trustee, Funding and the
Security Trustee agree that such relevant asset shall be released from
the trust constituted pursuant to Clause 5.1 (Trust in favour of
Mortgages Trustee) on
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the date that such relevant asset would otherwise have been repurchased
or re-transferred pursuant to Clause 8.7 (Completion of Repurchase).
6. PERFECTION OF THE ASSIGNMENT
6.1 PERFECTION EVENTS: The execution of transfers of the Mortgages to the
Mortgages Trustee and the notifications to Borrowers notifying such
Borrowers of the assignment of their Mortgage Loans and Related Security
to the Mortgages Trustee shall be completed within 20 business days of
receipt of a written request in accordance with Clause 6.2 (Perfection)
upon the occurrence of any of the following events:
(a) the valid service of an Intercompany Loan Enforcement Notice or a
Note Enforcement Notice, provided that the perfection of an
assignment of the Mortgage Portfolio shall not be required if the
sole reason for the service of any Note Enforcement Notice is a
default by a Currency Swap Provider of any Issuer; or
(b) unless otherwise agreed by the Rating Agencies, the termination of
the Seller's role as Administrator under the Administration
Agreement and failure of any substitute administrator to assume
the duties of the Administrator; or
(c) the Seller being required by an order of a court of competent
jurisdiction, or by a change in law occurring after the Initial
Closing Date, or by a regulatory authority of which the Seller is
a member or with whose instructions it is customary that the
Seller comply, to perfect the transfer of legal title to the
Mortgage Loans and the Related Security in favour of the Mortgages
Trustee; or
(d) the security under the Funding Deed of Charge or any material part
of such security being in jeopardy and it being necessary to
perfect the transfer of legal title to the Mortgage Loans and
their Related Security in favour of the Mortgages Trustee in order
to reduce such jeopardy materially; or
(e) the occurrence of an Insolvency Event in relation to the Seller;
or
(f) notice in writing from the Seller to the Mortgages Trustee and
Funding (with a copy to the Security Trustee) requesting such
transfer.
6.2 PERFECTION: If an event set forth in any of paragraphs (a) to (f) of
Clause 6.1 (Perfection Events) occurs and either the Mortgages Trustee or
Funding (with the consent of the Security Trustee) or the Security
Trustee so requests in writing, the Seller shall perfect the assignments
as contemplated by and in accordance with this Clause 6 (Perfection of
the Assignment) in relation to all Mortgage Loans then in the Mortgage
Portfolio and shall:
(a) deliver to the Mortgages Trustee all Title Deeds and (subject to
receipt of up to date schedules) the transfers referred to in
Clause 6.3 (Transfer Documents) duly executed by the Seller; and
15
(b) give formal notice of the transfers to the relevant Borrowers,
insurers and other persons (all such notices being in such form or
forms as may be required by the Mortgages Trustee or Funding (with
the written consent of the Security Trustee) or the Security
Trustee.
6.3 TRANSFER DOCUMENTS: If an event set forth in any of paragraphs (a) to
(f) of Clause 6.1 (Perfection Events) occurs, the transfers that the
Seller is required to deliver are:
(a) transfers in the form set out in Part 1 of Schedule 2 (Form of
Transfer (Registered Land - England and Wales)) of all the
Mortgages then in the Mortgage Portfolio secured (or intended to
be secured) over Mortgaged Properties which comprise registered
land (including any Mortgaged Property which is the subject of an
application for first registration at the Land Registry);
(b) transfers in the form set out in Part 2 of Schedule 2 (Form of
Transfer (Unregistered Land - England and Wales)) of all the
Mortgages then in the Mortgage Portfolio secured (or intended to
be secured) over Mortgaged Properties which comprise unregistered
land (excluding any which is the subject of an application for
first registration);
(c) transfers of the benefit of the Guarantees relating to any
relevant Mortgage Loan in the form of the Assignment of Guarantees
set out in Schedule 5 (Assignment of Guarantees); and
(d) transfers of the Related Security or any other property or
security sold to the Mortgages Trustee under this Agreement in
such form as the Mortgages Trustee or the Security Trustee may
reasonably require.
The Mortgages Trustee or Funding (with the consent of the Security
Trustee) or the Security Trustee may require that the form of any
transfer or assignment referred to in this Clause 6.3 be changed at any
time to reflect changes in law or relevant registry practice or
requirements.
6.4 PRIOR TO PERFECTION: Prior to perfection pursuant to Clause 6.1
(Perfection Events) and subject to Clause 7.3 (Seller Ratings) and
Clauses 3.6 (Insurance) and 4.9 (Insurance) neither the Mortgages Trustee
nor Funding nor the Security Trustee will:
(a) register itself at, or submit or require the submission of any
notice, form, request or application to, or pay any fee for the
registration of, or the noting of any interest at, the Land
Charges Department of H.M. Land Registry or at H.M. Land Registry
in relation to the Mortgages Trustee's and/or Funding's interests
in the Mortgage Portfolio;
(b) give or require the giving of any notice to any Borrower, insurer
or any other person of the assignment of that Borrower's Mortgage
Loan and its Related Security or such other property as may be
included in the Mortgage Portfolio to the Mortgages Trustee or the
charge by Funding of Funding's beneficial interest in that
Borrower's Mortgage
16
Loan and its Related Security or such property to the Security
Trustee pursuant to the Funding Deed of Charge; or
(c) send or require to be sent to any solicitor who has acted on
behalf of the Seller in respect of any Mortgage with respect to
which the Seller has not received a complete set of the Title
Deeds a letter or other communication requiring such solicitor to
hold such documents to the order of the Mortgages Trustee or the
Security Trustee (as the case may be).
6.5 FURTHER ASSURANCE: The Seller shall, subject to the other provisions of
this Clause 6 (Perfection of the Assignment), upon request do all such
other deeds, assurances, agreements, instruments, acts and things as the
Mortgages Trustee, Funding or the Security Trustee may require in order
to give effect to the terms of this Agreement and the assignments
contemplated herein.
7. UNDERTAKINGS
7.1 ADMINISTRATION: The Mortgages Trustee and Funding undertake that they
will at all times (or will direct the Administrator at all times to)
administer and enforce (and exercise their powers and rights and perform
their obligations under) the Mortgage Loans comprised in the Mortgage
Portfolio and their Related Security in accordance with the
Administration Procedures (for so long as these exist and thereafter in
accordance with such policies as would be applied by a reasonable,
prudent mortgage lender in the conduct of its business).
7.2 REIMBURSEMENT OF BORROWER: The Seller hereby undertakes with the
Mortgages Trustee and Funding that, in the event that any Borrower
establishes that it has at any time prior to the Initial Closing Date or,
as the case may be, the relevant Assignment Date, paid to the Seller any
amounts in excess of sums due to the Seller as at the date of payment
under the Mortgage Conditions applicable to that Mortgage Loan (other
than any Overpayment made by a Borrower under Flexible Mortgage Loan) the
Seller will reimburse the Borrower for such overpayment together with any
interest, cost or other expense associated therewith. The Seller further
agrees to hold the Mortgages Trustee and Funding harmless against any
such claims and to indemnify the Mortgages Trustee and Funding on an
after Tax basis in relation to any costs, expense, loss or other claim
which may arise in connection therewith. Any payment made by the Seller
to the Mortgages Trustee and Funding in discharge of the foregoing
indemnity shall be regarded as a rebate of part of the Purchase Price of
the relevant Mortgage Loan.
7.3 SELLER RATINGS: The Seller hereby undertakes with the Mortgages Trustee,
Funding and the Security Trustee that if the long term unsecured,
unsubordinated and unguaranteed debt obligations of the Seller cease to
be assigned a long term credit rating:
(a) from Xxxxx'x of no lower than Baal or from Fitch of no lower than
BBB+, the Seller (unless Xxxxx'x or Fitch, as applicable, confirms
that the then current ratings of the Notes will not be adversely
affected) will deliver to the Mortgages Trustee, Funding, the
Security Trustee (upon request) and the Rating Agencies details of
the names and
17
addresses of the Borrowers with Mortgage Loans then in the
Mortgage Portfolio on computer diskette and a draft letter of
notice to such Borrowers of the sale and assignment of those
Mortgage Loans and the Related Security to the Mortgages Trustee
in the form set out in Schedule 8 (Form of Notification to
Borrowers); and
(b) from S&P of no lower than BBB-, from Xxxxx'x of no lower than Baa3
or from Fitch of no lower than BBB-, the Seller (unless S&P,
Xxxxx'x and Fitch, as applicable, confirms that the then-current
ratings of the Notes will not be adversely affected) shall within
10 Business Days of such cessation give notice of the sale and
assignment effected by this Agreement to each Borrower with a
Mortgage Loan then in the Mortgage Portfolio in the form set out
in Schedule 8 (Form of Notification to Borrowers) (and if the
Seller fails to give such notice, then the Mortgages Trustee shall
give such notice as the Seller's attorney under the power of
attorney set out in Schedule 10 (Power of Attorney in favour of
the Mortgages Trustee, Funding and the Security Trustee)),
(c) provided that, in respect of Clause 7.3(a), should the Seller be
required as described in such Clause to provide the details of the
names and addresses of Borrowers to the Mortgages Trustee and
Funding, each of the Mortgages Trustee and Funding (to the extent,
in respect of Funding, that such information is to be delivered to
Funding other than at its United Kingdom branch office) hereby
agrees to appoint an agent that is located in the United Kingdom
and which maintains all appropriate registrations, notifications,
licences and authorities (if any) required under the Data
Protection Xxx 0000 to receive and maintain such information on
its behalf, and under no circumstances shall either the Mortgages
Trustee or Funding accept such information at its Jersey
registered office or otherwise in Jersey (unless Jersey is
declared an "approved state" by the European Commission, in which
case such data may be delivered to the Mortgages Trustee and/or
Funding at their respective Jersey offices).
7.4 PENDING PERFECTION: The Seller undertakes to the Mortgages Trustee,
Funding and the Security Trustee that, pending perfection under Clause 6
(Perfection of the Assignment), the Seller:
(a) shall promptly notify the Mortgages Trustee, Funding and (upon
request) the Security Trustee if it receives written notice of any
litigation or claim calling into question in any material way the
Seller's or the Mortgages Trustee's title to any Mortgage Loan
comprised in the Mortgage Portfolio or its Related Security or if
it becomes aware of any material breach of any of the
Representations and Warranties or other obligations under this
Agreement; and
(b) shall, if reasonably required so to do by the Mortgages Trustee,
participate or join in and lend its name to and take such other
steps as may reasonably be required by the Mortgages Trustee in
relation to, any legal proceedings in respect of the Mortgage
Loans and the Related Security to the extent necessary to protect,
preserve and enforce the Seller's or the Mortgages Trustee's or
Funding's or the Security Trustee's
18
title to or interest in any Mortgage Loan or its Related Security
provided that the Seller is reimbursed, subject to and in
accordance with the relevant priority of payments under and in
accordance with the Transaction Documents, by the Mortgages
Trustee or Funding for the reasonable legal expenses and costs of
such proceedings.
7.5 RESPONSIBILITY OF SELLER: The Seller hereby further undertakes with the
Mortgages Trustee and Funding that it is and at all times shall remain
solely responsible for any Product Switches (other than a Re-Fixed
Mortgage Loan), for funding any Cash Re-Draws made by a Borrower under a
Flexible Mortgage Loan, for funding any request for any Further Advance
made by a Borrower, and for paying to the Mortgages Trustee from time to
time an amount equal to the Unpaid Interest associated with any Non-Cash
Re-Draw made by a Borrower under a Flexible Mortgage Loan. For the
avoidance of doubt, neither the Mortgages Trustee nor Funding will be
required to advance moneys to the Seller or to a Borrower in order to
fund such a Re-Draw or Further Advance in any circumstances whatsoever.
7.6 PRODUCT SWITCHES AND FURTHER ADVANCES:
(a) Neither the Mortgages Trustee nor Funding shall (and each shall
procure that its agents do not):
(i) issue to any Borrower any offer of a Further Advance; or
(ii) issue to any Borrower any offer of a Product Switch (other
than a Re-Fixed Mortgage Loan),
without first having given notice in writing to the Seller seeking
confirmation from the Seller that the Seller will repurchase the
Mortgage Loan to which such offer relates from the Mortgages
Trustee in accordance with the terms of this Agreement.
(b) If the Seller gives such confirmation to the Mortgages Trustee,
the Mortgages Trustee (or its agents, including the Administrator,
on its behalf) shall then issue to that Borrower the relevant
offer referred to in paragraph (a) above and shall (in the case of
any offer referred to in paragraph (a) above) then notify the
Seller in writing as soon as the Mortgages Trustee has accepted
the mortgage documentation completed by the Borrower in relation
to such offer.
(c) The Mortgages Trustee shall not itself make any Further Advance or
Product Switch (other than in relation to a Re-Fixed Mortgage
Loan).
7.7 STANDARD VARIABLE RATE: Subject to the provisions of Clause 7.9, the
Seller covenants with the Mortgages Trustee, Funding and the Security
Trustee that, where the Administrator determines on any date that there
will be a Shortfall during the next succeeding Interest Period and
notifies the Seller to such effect, the Seller shall take all steps which
are necessary, including publishing any notice which is required in
accordance with the Mortgage Conditions, to set the Standard Variable
Rate and such other discretionary rates and margins applicable to the
Mortgage Loans at such levels as may be notified to the Seller by the
19
Mortgages Trustee, Funding or the Security Trustee (which rates shall be
the same rates as previously notified to the Mortgages Trustee, Funding
and the Security Trustee in accordance with Clause 4.3(b) of the
Administration Agreement) as being the rates required in order for no
Shortfall to arise.
7.8 SECURITY POWERS OF ATTORNEY: The Seller shall grant security powers of
attorney to the Mortgages Trustee, Funding and the Security Trustee in
the form set out in Schedule 10 (Power of Attorney in favour of the
Mortgages Trustee, Funding and the Security Trustee) allowing any of the
Mortgages Trustee, Funding and the Security Trustee and their delegates
from time to time (inter alia) to set the Standard Variable Rate, such
other discretionary rates and margins applicable to the Mortgage Loans
and (save for the Security Trustee) the rate of (and terms relating to)
the Existing Borrowers' Re-Fix Rate should the Seller fail to do so in
accordance with its obligations under this Agreement, but only to the
extent that such rates have been previously notified to the Mortgages
Trustee, Funding and the Security Trustee in accordance with Clause
4.3(b) of the Administration Agreement. Nothing in this Clause 7.8 shall
prevent the Seller (or any of its attorneys from time to time) from
setting a higher Northern Rock Standard Variable Rate or higher rates for
other discretionary rates and margins (or in the case of the Existing
Borrowers' Re-Fix Rate setting a higher rate and imposing terms more
advantageous to the Mortgages Trustee) than those to be set or required
by the Mortgages Trustee, Funding and (other than in respect to an
Existing Borrower's Re-Fix Rate) the Security Trustee.
7.9 SHORTFALL: Unless any of the Mortgages Trustee, Funding or the Security
Trustee needs to do so to avoid a Shortfall, none of the Mortgages
Trustee, Funding or the Security Trustee shall set the Standard Variable
Rate and other discretionary rates and margins for Mortgage Loans which
are in the Mortgages Trust (disregarding any discounts or additions to
it) at rates higher than the then equivalent rates for mortgage loans
which are not in the Mortgages Trust.
7.10 FORWARDING OF NOTICE: The Security Trustee undertakes, upon receipt of
any notice as specified in Clause 8.5(c) of the Mortgages Trust Deed, to
forward such notice to the Mortgages Trustee, Funding, the Seller and the
Cash Manager in the manner set forth in Clause 20 within three (3) London
Business Days of receipt thereof. The Security Trustee shall have no
other obligation other than the foregoing following receipt of such
notice.
8. WARRANTIES AND REPURCHASE BY THE SELLER
8.1 REPRESENTATIONS AND WARRANTIES: The Seller makes the Representations and
Warranties set out in Schedule 1 (Representations and Warranties) to
each of the Mortgages Trustee, Funding and the Security Trustee:
(a) in respect of each Mortgage Loan and its Related Security in the
Initial Mortgage Portfolio as at the date hereof and on the
Initial Closing Date;
(b) in relation to each New Mortgage Loan and its Related Security in
a New Mortgage Portfolio, on the date of the service of the
relevant New Mortgage Portfolio Notice and on the relevant
Assignment Date;
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(c) in the form set out in Part 2 of Schedule 1 (Representations and
Warranties) in relation to the matters and at the dates set out
therein; and
(d) in the form set out in Part 3 of Schedule 1 (Representations and
Warranties) in relation to the matters and at the dates set out
therein.
8.2 RELIANCE: The Seller acknowledges that the Representations and Warranties
are made with a view to inducing the Mortgages Trustee, Funding and the
Security Trustee either to enter into this Agreement and the other
Transaction Documents to which each is a party or to agree to purchase
the New Mortgage Loans and their Related Security comprised in each New
Mortgage Portfolio, and that each of the Mortgages Trustee, Funding and
the Security Trustee has entered into this Agreement and the other
Transaction Documents to which it is a party in reliance upon the
Representations and Warranties notwithstanding any information possessed
or discoverable by the Mortgages Trustee, Funding and/or the Security
Trustee. The Mortgages Trustee, Funding and the Security Trustee
acknowledge that they have not entered into this Agreement in reliance
upon any representation, warranty or undertaking other than those set out
in this Agreement or upon any other enquiry, investigation or search
whatsoever.
8.3 REMEDIES: The Mortgages Trustee's, Funding's and the Security Trustee's
sole remedy in respect of a breach of any of the Representations and
Warranties shall be to take action under this Clause 8 (Warranties and
Repurchase by the Seller) or under Clause 8.4 (Adjustments to Trust
Property) of the Mortgages Trust Deed. Furthermore, in respect of any
actual or alleged breach of Clause 8.1 (Representations and Warranties),
the Mortgages Trustee, Funding or the Security Trustee shall, as
applicable:
(a) notify the Seller as soon as reasonably practicable following any
claim or intimation of claim by any person of or arising from such
actual or alleged breach and thereafter keep the Seller informed
in relation to such claim or intimation;
(b) not settle or compromise any such claim made or intimated or
otherwise do anything which may be prejudicial to the position of
the Seller in relation thereto having regard to this Agreement,
except pursuant to the written directions of the Seller or with
the Seller's prior written approval, such directions and approval
not to be unreasonably withheld; and
(c) comply with the Seller's reasonable directions as to answering,
disputing, defending, compromising, settling, or otherwise in
relation to the claim made or initiated (including without
limitation the instruction of particular legal advisers), and if
and to the extent required by the Seller, do such things as the
Seller may reasonably require to enable and authorise the Seller
or persons nominated by the Seller to answer, dispute, defend,
compromise, settle or otherwise deal with any such claim or
intimated claim, or mitigate loss or potential loss on behalf of
the Mortgages Trustee, subject in each case to the Seller
indemnifying the Mortgages Trustee, Funding and
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the Security Trustee against the consequences of complying with
the Seller's directions and requirements.
8.4 REPURCHASE: Subject to Clause 8.14 (Repurchase Not Possible), in the
event of a material breach of any of the Representations or Warranties in
respect of any Mortgage Loan and/or its Related Security as at the
Initial Closing Date or, as the case may be, the relevant Assignment
Date, which could have a material adverse effect on the Mortgage Loan
and/or its Related Security (having regard to, among other things,
whether a loss is likely to be incurred in respect of the Mortgage Loan
to which the breach relates after taking account of the likelihood of
recoverability or otherwise of any sums under any applicable insurance
policies), and further provided that:
(a) the Mortgages Trustee, Funding or the Security Trustee has given
the Seller not less than 28 days' notice in writing;
(b) the Mortgages Trustee has obtained the consent of the Security
Trustee; and
(c) such breach, where capable of remedy, is not remedied to the
satisfaction of Funding and the Security Trustee within the 28 day
period referred to in (a) (or such longer period as Funding and
the Security Trustee may direct the Mortgages Trustee),
then at Funding's (with the consent of the Security Trustee) or the
Security Trustee's direction, the Mortgages Trustee may serve upon the
Seller a notice in the form of the Loan Repurchase Notice whereupon the
Seller will be required to repurchase the relevant Mortgage Loan and its
Related Security and any other Mortgage Loan secured or intended to be
secured by that Related Security or any part of it in accordance with
Clause 8.7 (Completion of Repurchase) , provided, however, that the
Security Trustee shall have no duty to provide any such notice to the
Seller or consider granting its consent pursuant to this Clause 8.4
unless the Security Trustee has been notified by a party to a Transaction
Document of such material breach of such Representation or Warranty
which, in the opinion of such party (as communicated to the Security
Trustee), could have a material adverse effect on the related Mortgage
Loan and/or its Related Security, taking into account the considerations
provided in this Clause 8.4, and further provided that prior to receipt
of such notice the Security Trustee shall be entitled to assume that no
such material breach has occurred.
8.5 REPURCHASE OF PRODUCT SWITCHES AND FURTHER ADVANCES: In the event of
there being at any date in respect of any Mortgage Loan assigned to the
Mortgages Trustee hereunder a PS/FA Event (other than a Mortgage Loan
becoming a Re-Fixed Mortgage Loan, such PS/FA Event being dealt with
under Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans)), the Seller
may at any time serve notice in the form of the Loan Repurchase Notice on
the Mortgages Trustee whereupon the Mortgages Trustee will be required to
sell and to re-transfer to the Seller in accordance with Clause 8.7
(Completion of Repurchase) any Mortgage Loan identified in the Loan
Repurchase Notice together with its Related Security and any other
Mortgage Loan secured or intended to be secured by that Related Security
or any part of it (any such Mortgage Loan or Mortgage Loans, a "PS/FA
MORTGAGE LOAN") free from the Mortgages Trust and any right or interest
that the Security Trustee may have in such PS/FA
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Mortgage Loan and its Related Security under the Funding Deed of Charge.
Any PS/FA Mortgage Loan repurchased by the Seller shall be released from
the Mortgages Trust and shall no longer constitute Trust Property and
shall be released from any right or interest that the Security Trustee
may have had in such Mortgage Loan and its Related Security under the
Funding Deed of Charge prior to such repurchase.
8.6 REPURCHASE OF FIXED RATE MORTGAGE LOANS
(a) Where a Mortgage Loan bears interest at a fixed rate for a certain
period (the "INITIAL FIXED RATE PERIOD"), after the expiry of
which the Borrower is entitled to apply for a new fixed rate
(whether or not subject to certain conditions), the Mortgages
Trustee may by notice in writing to the Seller given at any time
not more than 60 days before the expiry of that initial fixed rate
period (which for the avoidance of doubt shall exclude any period
of extension to which the relevant Borrower is entitled), offer to
re-sell to the Seller that Mortgage Loan together with its Related
Security if that Mortgage Loan becomes a Re-Fixed Mortgage Loan
during the 3-month period immediately following the end of that
initial fixed rate period. The offer will be in writing in the
form set out in Schedule 9 (Offer under Clause 8.6 ) and will be
signed by or on behalf of the Mortgages Trustee.
(b) The Seller may accept the offer made in accordance with paragraph
(a) above on the date on which that Mortgage Loan becomes a Re-
Fixed Mortgage Loan during the 3-month period immediately
following the end of the initial fixed rate period relating to it,
only by payment to the Mortgages Trustee of the consideration
payable for the repurchase of the relevant Mortgage Loan and its
Related Security in accordance with Clause 8.7 (Completion of
Repurchase).
(c) The parties hereto acknowledge that the effect of the payment to
the Mortgages Trustee by the Seller of the consideration for the
repurchase of the relevant Mortgage Loan and its Related Security
in accordance with paragraph (b) above will be the assignment to
the Seller of the beneficial ownership of, and all of the
Mortgages Trustee's beneficial right, title, interest and benefit
in and to, that Mortgage Loan, and completion of the repurchase
shall be effected by the parties in accordance with Clause 8.7
(Completion of Repurchase).
(d) The Seller hereby covenants that if it does not accept the offer
made by the Mortgages Trustee in accordance with paragraph (b)
above, then whether or not the Mortgage Loan becomes a Re-Fixed
Mortgage Loan, it will set the Existing Borrowers' Re-Fix Rate
applicable for the 3-month period immediately after expiry of the
initial fixed rate period relating to that Mortgage Loan at a rate
not less than that (and on terms not less advantageous to the
Mortgages Trustee or Funding than those) notified from time to
time to the Seller by the Mortgages Trustee, Funding or the
Administrator as being required by the Mortgages Trustee or
Funding.
8.7 COMPLETION OF REPURCHASE: Completion of any repurchase or re-transfer
shall take place:
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(a) in the case of any repurchase or re-transfer pursuant to any of
Clauses 8.4 (Repurchase) or 8.5 (Repurchase of Product Switches
and Further Advances) on the first London Business Day immediately
following expiry of a period of 10 days following the date of the
service upon the Seller of the relevant Loan Repurchase Notice or
at the Seller's earlier election; or
(b) in the case of any repurchase or re-transfer pursuant to Clause
8.6 (Repurchase of Fixed Rate Mortgage Loans), immediately upon
the Mortgage Loan becoming a Re-Fixed Mortgage Loan,
whereupon, the Seller shall pay to the Mortgages Trustee an amount equal
to the Current Balance of such Mortgage Loan or Mortgage Loans and any
Related Security and all Arrears of Interest and Accrued Interest
relating thereto as at the date of completion of such repurchase. The
provisions of Clause 8.8 (Transfers) and Clause 8.9 (Documentation) shall
apply to any such repurchase or re-transfer.
8.8 TRANSFERS: On the date of completion of any repurchase of a Mortgage Loan
and its Related Security in accordance with this Clause 8 (Warranties and
Repurchase by Seller), the Mortgages Trustee and Funding shall at the
cost of the Seller execute and deliver or cause their respective duly
authorised attorneys to execute and deliver to the Seller:
(a) if perfection of the assignment to the Mortgages Trustee has
occurred in accordance with Clause 6 (Perfection of the
Assignment):
(i) if the relevant Mortgage is over Registered Land, a transfer
of such Mortgage to the Seller in the form of the Registered
Transfer; or
(ii) if the relevant Mortgage is over Unregistered Land, a
transfer to the Seller in the form of the Unregistered
Transfer;
(b) a re-assignment of the rights of the Mortgages Trustee in respect
of the relevant Related Security each in a form reasonably
acceptable to the Seller (which shall, in the case of the re-
assignment of the Insurance Contracts, be substantially in the
form of the Assignment of Insurance Contracts set out in Schedule
3 (Assignment of Insurance Contracts); and
(c) a notification to the Administrator that all further sums due in
respect of such repurchased Mortgage Loan are for the Seller's
account.
8.9 DOCUMENTATION: Upon any completion of the repurchase of any Mortgage Loan
and its Related Security in accordance with this Clause 8 (Warranties and
Repurchase by Seller) the Seller shall cease to be under any further
obligation to hold any Title Deeds or other documents relating to such
Mortgage Loan or Mortgage Loans and its Related Security to the order of
the Mortgages Trustee and the Security Trustee and if the Mortgages
Trustee or the Security Trustee then holds the Title Deeds, the Mortgages
Trustee or, as the case may be, the Security Trustee shall forthwith
return them to the Seller. Any such repurchase by the Seller of a
Mortgage Loan or Mortgage Loans and its or their Related Security shall
constitute a
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discharge and release of the Seller from any claims which the Mortgages
Trustee and/or Funding or the Security Trustee may have against the
Seller arising from the relevant Representation or Warranty in relation
to that Mortgage Loan or Mortgage Loans and its or their Related Security
only, but shall not affect any rights arising from a breach of any other
express provision of this Agreement or any Representation or Warranty in
relation to any other Mortgage Loan and other Related Security.
8.10 NOTIFICATION: Forthwith after the Seller becomes aware of any event which
may reasonably give rise to an obligation under Clause 8 (Warranties and
Repurchase by Seller) to repurchase any Mortgage Loan it shall notify the
Mortgages Trustee, Funding and the Security Trustee in writing thereof as
soon as reasonably practicable.
8.11 NO PREJUDICE: The terms of this Clause 8 (Warranties and Repurchase by
the Seller) shall not prejudice the rights of the Mortgages Trustee or
the Beneficiaries under the Mortgages Trust Deed.
8.12 CLAIMS AGAINST SELLER: If a breach of a Representation or Warranty
arises in respect of any Mortgage Loan and (in either case) no repurchase
requirement arises in respect of the Seller pursuant to this Clause 8
(Warranties and Repurchase by the Seller), neither the Mortgages Trustee,
Funding nor the Security Trustee shall have any claim against the Seller
in respect of, or in relation to, such breach of Representation or
Warranty in relation to that Mortgage. For the avoidance of doubt, save
as provided for in this Clause 8 (Warranties and Repurchase by the
Seller), the Seller is not obliged to repurchase any other Mortgage Loan
or its Related Security.
8.13 ASSIGNMENT: If the Seller makes any payment to the Mortgages Trustee GIC
Account (or as the Mortgages Trustee shall direct) in full satisfaction
of any claim made by the Mortgages Trustee, Funding or the Security
Trustee in relation to any Representation or Warranty set out in Schedule
1 (Representations and Warranties), the Mortgages Trustee, Funding or the
Security Trustee, as the case may be, shall assign to the Seller such
rights as they have against any third party which relate to such claim.
8.14 REPURCHASE NOT POSSIBLE: If a Mortgage Loan has never existed, or has
ceased to exist, such that it is not outstanding on the date on which it
is due to be repurchased pursuant to this Clause 8 (Warranties and
Repurchase by the Seller), the Seller shall not be obliged to repurchase
the Mortgage Loan and the Related Security but shall instead indemnify
the Mortgages Trustee, Funding and the Security Trustee against any loss
suffered by reason of any Representation or Warranty relating to or
otherwise affecting that Mortgage Loan being untrue or incorrect by
reference to the facts subsisting at the date on which the relevant
Representation or Warranty was given, provided that the amount of such
indemnity shall not exceed the sum of (i) the Current Balance of the
Mortgage Loan that would have been payable by the Borrower in respect of
such Mortgage Loan on and after the relevant completion date for the
repurchase in relation to such Mortgage Loan had the Mortgage Loan
existed and complied with each of the Representations and Warranties set
out Schedule 1 (Representations and Warranties) as at such date in
relation to such Mortgage Loan and (ii) interest thereon from such
relevant completion date at the weighted average yield of the
25
Mortgage Loans.
8.15 INDEMNITY: The Seller shall indemnify the Mortgages Trustee against any
loss suffered as a result of any Borrower exercising a Right of Set Off
against the Mortgages Trustee provided that the amount of such indemnity
in relation to any Mortgage Loan shall not exceed the sum of the Current
Balance of that Mortgage Loan and interest payable by the Borrower under
that Mortgage Loan as at the date that the Borrower exercises the Right
of Set Off. In this clause "RIGHT OF SET OFF" means any right of set off
arising from a deposit of money made by the Borrower with the Seller or
from any transaction between the Borrower and the Seller other than one
relating to the Mortgage Loan.
9. FURTHER ASSURANCE
The parties hereto agree that they will co-operate fully to do all such
further acts and things and execute any further documents that may be
necessary or desirable to give full effect to the transactions
contemplated by this Agreement (but subject always to Clause 6
(Perfection of the Assignment)).
10. CONSEQUENCES OF BREACH
Without prejudice to Clause 8 (Warranties and Repurchase by the Seller),
the Mortgages Trustee, Funding and the Security Trustee severally
acknowledge to and agree with the Seller, and the Security Trustee
acknowledges to and agrees with Funding and the Mortgages Trustee, that
the Seller shall have no liability or responsibility (whether, in either
case, contractual or tortious, express or implied) for any loss or damage
for or in respect of any breach of, or any act or omission in respect of,
any of its obligations hereunder other than loss or damage directly (and
not indirectly or consequentially) suffered by the Mortgages Trustee
and/or Funding or the assets comprised in the Funding Security
constituted by the Funding Deed of Charge by reason of such breach, act
or omission. For this purpose (and without limiting the scope of the
above exclusion in respect of indirect or consequential loss or damage)
any loss or damage suffered by the Mortgages Trustee and/or Funding or
such assets which would not have been suffered by it or such assets had
the breach, act or omission in question not also been or given rise to an
Event of Default or enforcement of the security contributed by the
Funding Deed of Charge shall be treated as indirect or consequential loss
or damage.
11. SUBORDINATION
The Seller agrees with the Mortgages Trustee, Funding and the Security
Trustee that on the enforcement of any Mortgage any sums owed to the
Seller by a Borrower secured under such Mortgage and the rights and
remedies of the Seller in respect of the sums owed to the Seller shall at
all times be subject and subordinated to any sums owed to the Mortgages
Trustee by the Borrower and to the rights and remedies of the Mortgages
Trustee in respect of such sums owed to the Mortgages Trustee by the
Borrower.
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12. NON-MERGER
Any term of this Agreement to which effect is not given on the Initial
Closing Date or on any Assignment Date (including in particular, but
without limitation, the liability of the Seller under the Representations
and Warranties and the provisions of Clause 4 (Sale and Purchase of New
Mortgage Portfolios)) shall not merge and shall remain in full force and
effect notwithstanding the sale and purchase contemplated by this
Agreement.
13. NO AGENCY OR PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any relationship of
agency, save as expressly provided herein, or partnership between the
parties and that in fulfilling its obligations hereunder, each party
shall be acting entirely for its own account.
14. PAYMENTS
All payments to be made pursuant to this Agreement shall be made in
sterling in immediately available funds without exercising or seeking to
exercise any right of set-off as may otherwise exist and shall be deemed
to be made when they are received by the payee and shall be accounted for
accordingly unless failure to receive any payment is due to an error by
the payee's bank.
15. ASSIGNMENT
15.1 ASSIGNMENT: Subject always to the provisions of Clause 16 (Security
Trustee), no party hereto shall be entitled to assign all or any part of
its rights or obligations hereunder to any other party without the prior
written consent of each of the other parties hereto (which shall not, if
requested, be unreasonably withheld) save that Funding shall be entitled
to assign by way of security all or any of its rights under this
Agreement without such consent to the Security Trustee pursuant to the
Funding Deed of Charge and the Security Trustee may at its sole
discretion assign all or any of its rights under or in respect of this
Agreement without such consent to any successor Security Trustee under
the Funding Deed of Charge and may assign all of any part of the Funding
Security upon an enforcement of the Funding Security in accordance with
the Funding Deed of Charge.
15.2 ACKNOWLEDGEMENT OF SECURITY ASSIGNMENT: The Seller acknowledges that on
the assignment pursuant to the Funding Deed of Charge by Funding to the
Security Trustee of Funding's rights under this Agreement the Security
Trustee may enforce such rights in the Security Trustee's own name
without joining Funding in any such action (which right the Seller hereby
waives) and the Seller hereby waives as against the Security Trustee any
rights or equities in its favour arising from any course of dealing
between the Seller and Funding.
16. SECURITY TRUSTEE
16.1 VESTING OF RIGHTS: If there is any change in the identity of the security
trustee in accordance with the Funding Deed of Charge, the Seller, the
Mortgages Trustee and Funding shall execute such documents and take such
action as the successor security trustee and the outgoing security
trustee may require for the purpose of vesting in the successor security
27
trustee the rights and obligations of the outgoing security trustee
hereunder and releasing the outgoing security trustee from its future
obligations under this Agreement and the Seller shall give notice thereof
to the Rating Agencies.
16.2 NO ASSUMPTION: 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 Seller or Funding or the Mortgages
Trustee hereunder. Furthermore, any liberty or power which may be
exercised or any determination which may be made hereunder by the
Security Trustee may be exercised or made in the Security Trustee's
absolute discretion without any obligation to give reasons therefor, but
in any event must be exercised or made in accordance with the provisions
of the Funding Deed of Charge. Without prejudice to the generality of
the foregoing, all references to the Security Trustee taking action in
connection with any duty of the Seller shall also be read subject to
Clause 25 and Schedule 4 of the Administration Agreement.
17. NEW INTERCOMPANY LOANS
If Funding enters into a New Intercompany Loan Agreement, then the
Seller, the Mortgages Trustee, Funding and the Security Trustee shall
execute such documents and take such action as may be required by the
Rating Agencies for the purpose of including the New Issuer in the
Transaction including, without limitation:
(a) effecting any necessary changes to Clause 4 (Sale and Purchase of
New Mortgage Portfolios);
(b) ensuring that any Transaction Document relevant to a New Issuer
has been executed and delivered prior to the relevant Closing
Date;
(c) executing and delivering all documents required by Clause 4.4
(Closing and Conditions Precedent) in relation to any New Mortgage
Portfolio.
18. NON PETITION COVENANT; LIMITED RECOURSE
18.1 NON PETITION COVENANT: Each of the parties hereto hereby agrees that it
shall not institute against either Funding or the Mortgages Trustee any
winding-up, administration, insolvency or similar proceedings so long as
any sum is outstanding under any Intercompany Loan Agreement of any
Issuer or for two years plus one day since the last day on which any such
sum was outstanding.
18.2 LIMITED RECOURSE: Each of the parties hereto agrees that:
(a) in relation to the Mortgages Trustee, any amount payable by the
Mortgages Trustee to any other party to this Agreement under this
Agreement not being an amount payable out of the Trust Property in
accordance with the terms of the Mortgages Trust Deed shall only
be payable to the extent that on that date the Mortgages Trustee
has sufficient funds to pay such amount out of fees paid to it
under the Mortgages Trust Deed; and
28
(b) in relation to Funding:
(i) only the Security Trustee may enforce the security created
in favour of the Security Trustee under the Funding Deed of
Charge in accordance with the provisions thereof;
(ii) notwithstanding any other provision of this Agreement or any
other Transaction Document, no sum due or owing to any party
to this Agreement from or by Funding under this Agreement
shall be payable by Funding except to the extent that
Funding has sufficient funds available or (following
enforcement of the Funding Security) the Security Trustee
has realised sufficient funds from the Funding Security to
pay such sum subject to and in accordance with the relevant
Funding Priority of Payments and provided that all
liabilities of Funding required to be paid in priority
thereto or pari passu therewith pursuant to such Funding
Priority of Payments have been paid, discharged and/or
otherwise provided for in full; and
(iii) it shall not take any steps for the purpose of recovering
any amount payable by Funding or enforcing any rights
arising out of this Agreement against Funding otherwise than
in accordance with the Funding Deed of Charge.
18.3 CORPORATE OBLIGATIONS: To the extent permitted by law, no recourse under
any obligation, covenant, or agreement of any person contained in this
Agreement shall be had against any shareholder, officer or director of
such person as such, by the enforcement of any assessment or by any legal
proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is a corporate obligation of
each person expressed to be a party hereto and no personal liability
shall attach to or be incurred by the shareholders, officers, agents or
directors of such person as such, or any of them, under or by reason of
any of the obligations, covenants or agreements of such person contained
in this Agreement, or implied therefrom, and that any and all personal
liability for breaches by such person of any of such obligations,
covenants or agreements, either under any applicable law or by statute or
constitution, of every such shareholder, officer, agent or director is
hereby expressly waived by each person expressed to be a party hereto as
a condition of and consideration for the execution of this Agreement.
19. AMENDMENTS AND WAIVER
19.1 ENTIRE AGREEMENT: This Agreement sets out the entire agreement and
understanding between the parties with respect to the subject matter of
this Agreement superseding all prior oral or written understandings other
than the other Transaction Documents.
19.2 AMENDMENTS AND WAIVER: No amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing and
signed by each of the parties hereto. In the case of a waiver or
consent, such waiver or consent shall be effective only in the specific
instance and as against the party or parties giving it for the specific
purpose for which it is given.
29
19.3 RIGHTS CUMULATIVE: The respective rights of each of the parties to this
Agreement are cumulative and may be exercised as often as they consider
appropriate. No failure on the part of any party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any
other right. The remedies in this Agreement are cumulative and not
exclusive of any remedies provided by law.
20. NOTICES
Any notices or other communication or document to be given or delivered
pursuant to this Agreement to any of the parties hereto shall be
sufficiently served if sent by prepaid first class post, by hand or by
facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched or (where delivered by hand) on
the day of delivery if delivered before 17.00 hours on a London Business
Day or on the next London Business Day if delivered thereafter or (in the
case of first class post) when it would be received in the ordinary
course of the post and shall be sent:
(a) in the case of the Seller, to Northern Rock plc, Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (facsimile number
0191 213 2203) for the attention of the Group Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance Trustees
Limited, 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands, (facsimile number 01534-609-333) for the attention of the
Company Secretary;
(c) in the case of Funding, to Granite Finance Funding Limited, 4th
Floor, 00 Xxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX,
(facsimile number 0207-332-6199) for the attention of the Company
Secretary; and
(d) in the case of the Security Trustee, to The Bank of New York
(London Branch), at Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX
(facsimile number 020-7964-6399) for the attention of Corporate
Trust (Global Structured Finance),
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 fifteen days prior written notice in accordance with the
provisions of this Clause 20.
21. THIRD PARTY RIGHTS
A person who is not a party to this Agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) Xxx 0000, but this
shall not affect any right or remedy of a third party which exists or is
available apart from that Act.
22. EXECUTION IN COUNTERPARTS; SEVERABILITY
22.1 COUNTERPARTS: 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
30
executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same instrument.
22.2 SEVERABILITY: Where any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations under this Agreement, or of such provision or obligation in
any other jurisdiction, shall not be affected or impaired thereby.
23. GOVERNING LAW AND SUBMISSION TO JURISDICTION
23.1 GOVERNING LAW: This Agreement is governed by, and shall be construed in
accordance with, English law.
23.2 SUBMISSION TO JURISDICTION: Each of the parties hereto irrevocably agrees
that the courts of England shall have jurisdiction to hear and determine
any suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with this Agreement and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
24. PROCESS AGENT
The Mortgages Trustee irrevocably and unconditionally appoints Mourant &
Co. Capital (SPV) Limited at Xxxxxx Xxxxx, 00 Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxx XX0X 0XX or otherwise at its registered office 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 Mourant & Co. Capital (SPV) Limited ceasing so to act it
will appoint another person with a registered office in London as its
agent for service of process.
25. APPROPRIATE FORUM
Each of the parties hereto irrevocably waives any objection which it
might now or hereafter have to the courts of England being nominated as
the forum to hear and determine any Proceedings and to settle any
disputes, and agrees not to claim that any such court is not a convenient
or appropriate forum.
26. TRANSACTION DOCUMENTS
To the extent necessary to comply with the requirements of Section 2 Law
of Property (Miscellaneous Provisions) Xxx 0000, this Agreement
incorporates by reference to them the Transaction Documents.
AS WITNESS whereof the parties hereto have executed this Agreement for delivery
on the day and year first before written.
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
PART 1
1. The particulars of each Mortgage Loan and its related Mortgage in the
Initial Mortgage Portfolio set out in Appendix A to this Agreement are
complete, true and accurate in all material respects.
2. Immediately prior to a Closing Date or an Assignment Date, as the case
may be, subject to completion of any registration which may be pending at
H.M. Land Registry, the Seller was the absolute beneficial and legal
owner of the Mortgages, the Related Security and the other property to be
assigned by the Seller to the Mortgages Trustee under this Agreement at
such Closing Date or such Assignment Date, as the case may be, and the
Seller has not assigned (whether by way of absolute assignment or by way
of security only), transferred, charged, disposed of or dealt with the
benefit of any of the Mortgage Loans or their related Mortgages, any of
the other rights relating thereto or any of the property, rights, titles,
interests or benefits to be sold or assigned pursuant to this Agreement
other than pursuant to this Agreement.
3. Each Mortgage Loan and its related Mortgage and the Related Security
constitutes a valid and binding obligation of the Borrower enforceable in
accordance with its terms (save any terms which are not binding by virtue
of the Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair
Terms in Consumer Contracts Regulations 1999) and each related Mortgage
and the Related Security secures the repayment of all advances, interest,
costs and expenses payable by the relevant Borrower to the Seller in
priority to any other charges registered against the relevant Mortgaged
Property.
4. At the time that it was made, each Mortgage Loan complied in all respects
with applicable laws and regulations including, without limitation,
consumer protection, data protection and contract law.
5. Subject to completion of any registration which may be pending at H.M.
Land Registry, each Mortgage either constitutes, or will constitute,
following registration at H.M. Land Registry, a first ranking charge by
way of legal mortgage over the relevant Mortgaged Property.
6. Each relevant Mortgaged Property is located in England or Wales.
7. All steps necessary to perfect the Seller's title to each Mortgage Loan
and its related Mortgage were duly taken at the appropriate time or are
in the process of being taken with all due diligence.
8. No lien or right of set-off or counterclaim (other than a Right of Set-
off referred to in Clause 8.15 (Indemnity)) has been created or arisen
between the Seller and any Borrower which would entitle such Borrower to
reduce the amount of any payment otherwise due under the relevant
Mortgage Loan save in relation to the Unfair Terms in Consumer Contracts
Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations
1999 and save in relation to section 75 of the Consumer Credit Xxx 0000.
32
9. Prior to making a Mortgage Loan to a Borrower, the Seller instructed or
required to be instructed on its behalf solicitors to carry out in
relation to the relevant Mortgaged Property all investigations, searches
and other actions that would have been undertaken by the Seller acting in
accordance with standards consistent with those of a reasonable and
prudent mortgage lender, when advancing money in an amount equal to such
advance to an individual to be secured on a mortgaged property of the
kind permitted under the Lending Criteria and a report on title was
received by or on behalf of the Seller from such solicitors which, either
initially or after further investigation revealed no material matter
which would cause the Seller, acting reasonably, to decline the Mortgage
Loan having regard to the Lending Criteria.
10. In relation to each Mortgage the Borrower has a good and marketable title
to the relevant Mortgaged Property.
11. Prior to making a Mortgage Loan the relevant Mortgaged Property was
valued by an independent valuer from the panel of valuers from time to
time appointed by the Seller or by an employee valuer of the Seller, and
the results of such valuation would be acceptable to a reasonable and
prudent mortgage lender.
12. Prior to making a Mortgage Loan, the nature and amount of such Mortgage
Loan, the circumstances of the relevant Borrower and nature of the
relevant Mortgaged Property satisfied the Lending Criteria in force at
that time in all material respects.
13. The exercise of any discretion by the Seller in the making of any
Mortgage Loan has been consistent with the practice of a reasonable and
prudent mortgage lender.
14. Each Mortgage Loan and its related Mortgage has been made on the terms of
the Standard Mortgage Documentation (so far as applicable) which has not
been varied in any material respect, save for the making of the Base Rate
Pledge.
15. No agreement for any Mortgage Loan (other than to the extent it relates
to the funding of buildings insurance premiums) is or has ever been,
wholly or partly regulated by the Consumer Credit Xxx 0000 (other than by
Sections 137 to 140 of such Act) or constitutes an extortionate credit
bargain under Sections 137 to 140 of such Act or, to the extent it is so
regulated or partly regulated, all the requirements of the Consumer
Credit Act have been met in full.
16. Interest on each Mortgage Loan: (a) is charged on each Mortgage Loan in
accordance with the provisions of that Mortgage Loan and its related
Mortgage; (b) is not in any event adjusted by reference to the principal
amount due thereunder; (c) is payable monthly in advance; and (d) is
calculated by reference to the Standard Variable Rate, subject to any
applicable caps, discounts and fixed rates and the Base Rate Pledge; and
(e) subject to (d) above, may be set by the Seller and its successors and
assigns to that Mortgage Loan.
17. No payment of interest (or in the case of Repayment Mortgage Loans,
principal and interest) equivalent to an amount in excess of one month's
instalment at the applicable rate in respect
33
of a Mortgage Loan in the Initial Mortgage Portfolio was at any time
during the 12 months before the relevant Closing Date or Assignment Date,
as the case may be, in arrears.
18. So far as the Seller is aware, no Borrower is in material breach of its
Mortgage.
19. So far as the Seller is aware, the underwriting, origination and
completion of each Mortgage Loan is not the subject of fraud by any
person (including, without limitation, the Borrower or any professional
or third party employed or engaged on behalf of the Seller).
20. As at the date of this Agreement, the first payment due has been paid by
the relevant Borrower in respect of each Mortgage Loan and each Mortgage
Loan was fully performing.
21. Where any Borrower is or was entitled to repayment of any early repayment
charge in respect of any mortgage previously held by the Borrower with
the Seller, that repayment has been or will be made by the Seller.
22. Except where a Mortgaged Property was at completion of the relevant
Mortgage (or, where appropriate, in the case of self-build properties, at
the date of completion of the relevant mortgaged property) covered by the
Block Buildings Policy or a block buildings policy providing equivalent
cover, the Seller took all reasonable steps to ensure that at the date of
completion of the relevant Mortgage Loan each Mortgaged Property was:
(a) insured under a buildings policy either (i) in the joint names of
the Borrower and the Seller or (ii) with the interest of the
Seller noted thereon;
(b) insured under a Block Buildings Policy; or
(c) with respect to leasehold properties, insured by the relevant
landlord with the Seller's approval,
and in all cases against risks usually covered by a comprehensive
buildings policy and to an amount not less than the full reinstatement
cost of such Mortgaged Property as determined by an independent valuer or
a valuer employed by the Seller.
23. The Block Buildings Policy referred to above covers such fire and other
commercial risks as would be required by the Seller acting in accordance
with its normal standard for an amount not less than the full
reinstatement value of the Properties covered by the Block Buildings
Policy.
24. The Insurance Contracts are in full force and effect and all premiums
thereon due on or before the date of this Agreement have been paid in
full and the Seller is not aware of any circumstances giving the insurer
under the Insurance Contracts the right to avoid or terminate such policy
in so far as it relates to the Mortgaged Properties or the Mortgage
Loans. Where the Lending Criteria then in force required that a
Mortgage Loan was covered by the Insurance Contract referred to in
paragraph 1 of Schedule 4 (Insurance Contracts), that Mortgage Loan is
covered by such Insurance Contract.
34
25. To the extent that a Guarantee was required under the Lending Criteria in
relation to a particular Mortgage Loan, that Guarantee constitutes the
valid, binding and enforceable obligations of the guarantor thereunder
(save to the extent that the Guarantee is not valid, binding or
enforceable by virtue of the Unfair Terms in Consumer Contracts
Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations
1999).
26. If a Mortgaged Property is leasehold or long leasehold, written notice
has been given to the landlord of the creation of the Mortgage.
27. In relation to each Mortgage, any person who at the date when the
Mortgage Loan was made has been identified by the Borrower to the Seller
as residing or about to reside in the relevant Mortgaged Property is
either named as a joint Borrower or has signed a form of consent
declaring that he or she agrees that any present or future rights or
interests as he or she may have or acquire over or in respect of the
relevant Mortgaged Property shall be postponed and made subject to the
rights, interests and remedies of the Seller under the relevant Mortgage
and that he or she shall not claim any such rights or interests against
the Seller.
28. No Borrower was under 18 years of age at the time of completion of the
relevant Mortgage Loan.
29. No Mortgage Loan has a final maturity beyond January 2039.
30. The Seller has procured that full and proper accounts, books and records
have been kept showing clearly all material transactions, payments,
receipts and proceedings relating to that Mortgage Loan and its Mortgage
and all such accounts, books and records are up to date and in the
possession of the Seller or held to its order (subject to the provisions
of the Mortgages Trust Deed).
31. The origination and collection practices employed by the Seller with
respect to the Mortgage Loans have been, in all respects, legal and
consistent with the practice of a reasonable and prudent mortgage lender.
32. The Seller has not received written notice of any litigation or claim
calling into question in any material way its title to any Mortgage Loan
and its Mortgage or the value of any security. The Seller is not engaged
in any litigation, and no litigation is pending or threatened by the
Seller, against any person in connection with any report, valuation,
opinion, certificate, consent or other statement of fact or opinion given
in connection with any Mortgage Loan received by the Seller in connection
with the origination of any Mortgage Loan.
33. In respect of any Mortgaged Property which is subject to a second or
subsequent mortgage or standard security, the Seller has first priority
for the full amount of the Mortgage Loan and all costs, fees and expenses
relative thereto.
34. Subject to completion of any registration or recording which may be
pending at the Land Registry, all Property Deeds and Mortgage Loan Files
are held by, or to the order of, the Seller.
35
35. Each Borrower is a natural person, and no Borrower is at present an
employee or an officer of the Seller.
36. All Mortgage Loans were originated by or on behalf of the Seller in the
ordinary course of the Seller's residential secured lending activities.
No Mortgage Loan was acquired by the Seller subject to any discount and
no Mortgage Loan has been written down by the Seller in its accounts.
37. The Mortgage Loans and their related Mortgages contain no obligations on
the part of the Seller to make any further advances, and all costs, fees
and expenses incurred in making, closing or registering the Mortgage
Loans and the Related Security have been paid in full.
38. All formal approvals, consents and other steps necessary to permit a
legal and equitable transfer of, and a transfer of servicing away from
the Seller of, the Mortgage Loans and their related Mortgages to be sold
under this Agreement whenever required under the Transaction Documents
have been obtained or taken and there is no requirement in order for the
transfer to be effective to notify the Borrower before, on or after any
equitable transfer or before any legal transfer of the Mortgage Loans and
their related Mortgages.
39. So far as the Seller is aware, none of the terms in any Mortgage Loan and
its related Mortgage are unfair terms within the meaning of the Unfair
Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in
Consumer Contracts Regulations 1999 in any material respect save those
which impose Early Repayment Charges.
40. The Seller has confirmed to all relevant Borrowers that where any
Mortgage Loan provides that where any Early Repayment Charge is payable
at any time when the interest rate payable under that Mortgage Loan is
equal to or set by reference to the Standard Variable Rate (including
without limitation where the Mortgage Loan provides for a capped or
discounted rate), the interest rate payable under that Mortgage Loan will
be no more than 1.99 per cent. above the Bank of England's base rate.
41. In relation to a Right to Buy Mortgage Loan:
(a) in the case of each Mortgage Loan the Seller was at the time of
origination of that Mortgage Loan an approved lending institution
within the meaning given to that expression in the Housing Xxx
0000;
(b) the original advance was made to the person exercising the right
to buy; and
(c) the original advance was made for the purposes of enabling the
recipient thereof to purchase the relevant Mortgaged Property.
For the purpose of this paragraph 41, "RIGHT TO BUY MORTGAGE LOAN" means
a Mortgage Loan in respect of which the "right to buy" provisions of the
Housing Xxx 0000 apply (other than any Mortgage Loan in respect of which
the period during which the statutory charge referred to in section 156
of that Act would have existed, had the relevant circumstances applied,
has expired).
36
42. The loyalty discount applicable to certain Mortgage Loans after seven
years will not apply to any such Mortgage Loans during any period when
the interest rate is fixed.
43. The Seller has paid to the relevant Borrower the full amount of the
cashback payment in relation to any Cashback Mortgage Loan, either upon
completion of the relevant Mortgage Loan or, if subsequent to completion,
prior to the assignment of such Mortgage Loan to the Mortgages Trustee.
44. No Mortgage Loan has a Current Balance of more than
{pound-sterling}350,000.
45. Each Mortgage Loan, Mortgage Deed and Related Security in the Initial
Mortgage Portfolio was made not earlier than 1 July 1995.
46. Each Mortgage Loan was originated by the Seller in pounds sterling and is
denominated in pounds sterling (or originated and denominated in euro at
any time when the euro has been adopted as the lawful currency of the
United Kingdom) and is currently repayable in pounds sterling.
47. The Seller's Lending Criteria are consistent with the criteria that would
be used by a reasonable and prudent mortgage lender.
48. The Seller is not aware of any material claim outstanding under any of
the Buildings Policies relating to a Mortgaged Property.
49. No Mortgage Loan has an LTV greater than 95 per cent.
50. Each Mortgage Loan has been made for one of the following purposes:
(a) the purchase of land; or
(b) the provisions of dwellings or business premises on any land; or
(c) the alteration, enlarging, repair or improvement of a dwelling or
business premises on any land provided the creditor is the
creditor under (i) an agreement by which the debtor is provided
with credit for any of the purposes in (a) or (b) above or (ii) an
agreement refinancing an agreement under which the debtor is
provided with credit for any of the purposes in (a) or (b) above;
or (iii) a debtor-creditor agreement secured by any land mortgage
to refinance any existing indebtedness of the debtor, whether to
the creditor or another person, under any agreement by which the
debtor was provided with credit for any of the purposes in (a) and
(b) above.
Any reference in this Schedule 1 to solicitors includes licensed conveyancers.
37
PART 2
1. In respect of each of the Preliminary Prospectus as of its date (except
insofar as the information contained therein has been amended,
supplemented or deleted in the Prospectus) and the Prospectus as at the
date thereof:
(a) each of them contained all information with respect to the Seller,
the Initial Mortgage Portfolio and to the Notes which was material
in the context of the issue and offering of the Notes (including
all information required by English law);
(b) the statements contained in each of them relating to the Seller
and the Initial Mortgage Portfolio were in every material
particular true and accurate and not misleading;
(c) the opinions and intentions expressed in each of them with regard
to the Seller and the Initial Mortgage Portfolio were honestly
held, were reached after considering all relevant circumstances
and were based on reasonable assumptions;
(d) there were no other facts in relation to the Seller, the Initial
Mortgage Portfolio or the Notes the omission of which would, in
the context of the issue and offering of the Notes, make any
statement in either of them misleading; and
(e) all reasonable enquiries had been made by the Seller to ascertain
such facts and to verify the accuracy of all such information and
statements.
2. The Seller has not acquired or owned or possessed any rights in the
Mortgages Trustee or Funding such that it would "control" the Mortgages
Trustee or Funding within the meaning of section 416 ICTA 1988.
There is not any "connection" (within the meaning of section 87 Finance
Act 1996) between either the Mortgages Trustee or Funding, respectively,
and any Borrower.
38
PART 3
The Seller makes the following representations and warranties to each of the
Mortgages Trustee, Funding and the Security Trustee:
1. STATUS: It is a public limited company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which it is
incorporated, capable of being sued in its own right and not subject to
any immunity from any proceedings, and it has the power to own its
property and assets and to carry on its business as it is being
conducted.
2. POWERS AND AUTHORITY: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of each of the
Transaction Documents to which it is or will be a party, and each such
Transaction Document has been duly executed and delivered by it.
3. LEGAL VALIDITY: Each Transaction Document to which it is or will be a
party constitutes or when executed in accordance with its terms will
constitute its legal, valid and binding obligation.
4. NON-CONFLICT: The execution by it of each of the Transaction Documents
to which it is a party and the exercise by it of its rights and the
performance of its obligations under such Transaction Documents will not:
(a) result in the existence or imposition of, nor oblige it to create,
any Security Interest in favour of any person over all or any of
its present or future revenues or assets save for any which are
created under or pursuant to the Funding Deed of Charge;
(b) conflict with any document which is binding upon it or any of its
assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial order of
any government, governmental body or court, domestic or foreign,
having jurisdiction over it.
5. NO LITIGATION: It is not a party to any material litigation, arbitration
or administrative proceedings and, to its knowledge, no material
litigation, arbitration or administrative proceedings are pending or
threatened against it.
6. CONSENTS AND LICENCES: All governmental consents, licences and other
approvals and authorisations required in connection with the entry into,
performance, validity and enforceability of, and the transactions
contemplated by, the Transaction Documents have been obtained or effected
(as appropriate) and are in full force and effect.
39
SCHEDULE 2
FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND
40
PART 1
FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)
In the form of H.M. Land Registry Form TR4
41
PART 2
FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)
This Transfer of Mortgages is made on [ ] between NORTHERN
ROCK PLC (registered number 3273685) whose registered office is at Xxxxxxxx
Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (hereinafter called the
"TRANSFEROR") of the one part and GRANITE FINANCE TRUSTEES LIMITED (registered
number 79309) whose registered office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx,
Xxxxxx XX0 0XX, Channel Islands (hereinafter called the "TRANSFEREE") of the
other part.
WHEREAS:
(A) By the charges by way of legal mortgage ("MORTGAGES") brief particulars
of which are set out in the Annexure hereto the properties brief
particulars of which are similarly set out ("PROPERTIES") became security
for the repayment of the moneys therein mentioned.
(B) By a mortgage sale agreement dated 26 March 2001 made between inter alios
the Transferor and the Transferee, the Transferor has agreed to sell and
the Transferee has agreed to buy all right, title, interest and benefit
(both present and future) in and under the Mortgages for the
consideration hereinafter mentioned.
NOW THIS DEED WITNESSETH as follows:
1. In consideration of the sums payable and the other consideration under
the Agreement by the Transferee (receipt of which is hereby acknowledged)
the Transferor with full title guarantee hereby transfers unto the
Transferee all right, title, interest and benefit (both present and
future) in and under the Mortgages including for the avoidance of doubt:
(i) the right to demand, xxx for, recover, receive and give receipts
for all principal moneys payable or to become payable under the
Mortgages or the unpaid part thereof and the interest due or to
become due thereon; and
(ii) the benefit of all securities for such principal moneys and
interest, the benefit of all consents to mortgage signed by
occupiers of the Properties, and the benefit of and the right to
xxx on all covenants with the Transferor in each Mortgage and the
right to exercise all powers of the Transferor in relation to each
Mortgage; and
(iii) all the estate and interest in the Properties vested in the
Transferor subject to redemption or cesser; and
(iv) all causes of action of the Transferor against any person in
connection with any report, valuation, opinion, certificate or
other statement of fact or opinion or consent to mortgage given in
connection with any Mortgage or affecting the Transferor's
decision to make the relevant advance.
42
IN WITNESS of which NORTHERN ROCK PLC has caused this Transfer to be executed
and delivered as a deed on the date which appears first above.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
________________________________
Authorised Signatory
Name:
Title:
________________________________
Authorised Signatory
Name:
Title:
[Alternative methods of executing as a deed will be acceptable if effective]
43
SCHEDULE REFERRED TO IN THE FOREGOING TRANSFER BY
NORTHERN ROCK PLC
IN FAVOUR OF GRANITE FINANCE TRUSTEES LIMITED
1 2 3 4
ACCOUNT NO. PROPERTY ADDRESS NAME(S) DATE OF MORTGAGE
COMPLETION
44
SCHEDULE 3
ASSIGNMENT OF INSURANCE CONTRACTS
THIS ASSIGNMENT is made by way of deed on 26 March 0000
XXXXXXX
XXXXXXXX XXXX PLC (registered number 3273685) whose registered office is at
Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX ("NORTHERN ROCK");
and
GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel Islands
(the "MORTGAGES TRUSTEE")
WHEREAS
(A) By a mortgage sale agreement (as amended, varied, supplemented or novated
from time to time "MORTGAGE SALE AGREEMENT") dated 26 March 2001 and made
between Northern Rock, as Seller, the Mortgages Trustee, Granite Finance
Funding Limited ("FUNDING") and The Bank of New York, as security trustee
(the "SECURITY TRUSTEE"), certain mortgages (the "MORTGAGES") were agreed
to be transferred to the Mortgages Trustee.
(B) Northern Rock has the benefit of the Insurance Contracts, as defined in
the Master Definitions Schedule dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to the Mortgages
and the mortgaged properties upon which they are secured (the "MORTGAGED
PROPERTIES") as well as to certain mortgages and properties in which the
Mortgages Trustee have no interest.
(C) This Assignment is supplemental to the Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
In further consideration of the sums and the other consideration referred to in
the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee absolutely all the estate and interest in
the Insurance Contracts including the rights to receive the proceeds of any
claim to the extent only that such estate, interest, and rights relate to the
Properties and/or the Mortgages, to hold the same unto the Mortgages Trustee
absolutely.
45
IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be executed
and delivered as a Deed or the date which first appears above.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
________________________________
Authorised Signatory
Name:
Title:
________________________________
Authorised Signatory
Name:
Title:
46
SCHEDULE 4
INSURANCE CONTRACTS
POLICY NUMBER INSURER POLICY NAME/TYPE DATE OF POLICY
1. NR 9501 Northern Rock Mortgage Indemnity Mortgage Indemnity 18.07.1996
Company Limited
2.(a)BL-HHS AXA General Insurance Limited Supercover Buildings and Contents 01.01.1997
(b)DR-FHH AXA General Insurance Limited Superchoice Buildings and Contents 01.01.1997
(c)DR-SGD AXA General Insurance Limited Supercover Gold Buildings and Contents 01.11.1999
(d)AG112/Z1413248 AXA General Insurance Limited Contingency Insurance 18.10.1999
(e)AG112/Z1413256 AXA General Insurance Limited Properties in Possession 18.10.1999
(f)BL-BBR AXA General Insurance Limited Cover Me Buildings and Contents 18.12.2000
47
SCHEDULE 5
ASSIGNMENT OF GUARANTEES
THIS ASSIGNMENT is made by way of deed on the 26th day of March 2001
BETWEEN:
NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX ("NORTHERN ROCK");
and
GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel Islands
(registered number 79309) (the "MORTGAGES TRUSTEE")
WHEREAS:
(A) By a mortgage sale agreement ( as amended, varied, supplemented or
novated from time to time "MORTGAGE SALE AGREEMENT") dated 26 March 2001
and made between Northern Rock, the Mortgages Trustee, Granite Finance
Funding Limited and The Bank of New York, certain mortgages (the
"MORTGAGES") were agreed to be transferred and assigned to the Mortgages
Trustee.
(B) Northern Rock has the benefit of the Guarantees as defined in the Master
Definitions Agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to certain of the
Mortgages.
(C) This Assignment is made pursuant to the Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
In further consideration of the sums and the other consideration referred to in
the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee all its right, title, interest and benefit
(both present and future) in the Guarantees relating to the Mortgages the
subject of a Transfer of even date herewith including for the avoidance of
doubt:
(i) the benefit of and the right to xxx on all covenants with and
undertakings to Northern Rock in each Guarantee and the right to exercise
all powers of Northern Rock in relation to each Guarantee; and
(ii) all the estate and interest in the Guarantees vested in Northern Rock;
to hold the same unto the Mortgages Trustee absolutely.
IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be executed
and delivered as a deed on the date which first appears above.
48
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
________________________________
Authorised Signatory
Name:
Title:
________________________________
Authorised Signatory
Name:
Title:
[Alternative methods of executing as a deed will be acceptable if effective]
49
SCHEDULE 6
NEW MORTGAGE PORTFOLIO NOTICE
Dated [ ]
1. It is hereby agreed for the purpose of this notice the "PRINCIPAL
AGREEMENT" shall mean the Mortgage Sale Agreement dated 26 March 2001
made between (1) NORTHERN ROCK PLC (the "SELLER"), (2) GRANITE FINANCE
TRUSTEES LIMITED (the "MORTGAGES TRUSTEE") (3) GRANITE FINANCE FUNDING
LIMITED ("FUNDING") and (4) THE BANK OF NEW YORK (the "SECURITY
TRUSTEE"), as the same may be amended, varied, supplemented or novated
from time to time.
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. In accordance with and subject to Clause 4.1 (Agreement to Assign) of the
Principal Agreement, upon receipt by the Seller of the duplicate of this
notice signed by the Mortgages Trustee, there shall exist between the
Seller and the Mortgages Trustee an agreement (the "AGREEMENT FOR SALE")
for the assignment by the Seller to the Mortgages Trustee of the New
Mortgage Loans and the Related Security more particularly described in
the Schedule hereto (other than any New Mortgage Loans and their Related
Security which have been redeemed in full prior to the next following
Assignment Date). Completion of such sale shall take place, subject to
the provisions of the Principal Agreement, on [ ] (the
"ASSIGNMENT DATE").
4. The Seller hereby confirms that the conditions required to be fulfilled
pursuant to Clause 4.2 (Conditions to Effecting an Assignment of New
Mortgage Loans) of the Principal Agreement have been fulfilled [/save for
conditions ( ) ( ) and ( )]
5. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
provisions of the Principal Agreement.
Signed for and on behalf of )
NORTHERN ROCK PLC )
by: )
_________________________
[On duplicate
We hereby acknowledge receipt of the New Mortgage Portfolio Notice dated
[ ], and confirm [that the conditions set out in paragraph ( ) ( )
and ( ) of Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans) have been waived and] the assignment of the New Mortgage Loans as set
out in that notice.
50
Signed for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
________________________________]
51
SCHEDULE
1 2 3 4
ACCOUNT NO. PROPERTY ADDRESS NAME(S) DATE OF MORTGAGE
COMPLETION
52
SCHEDULE 7
LOAN REPURCHASE NOTICE
Dated [ ]
1. We refer to the Mortgage Sale Agreement dated 26 March 2001 (as amended,
varied, supplemented or novated from time to time the "PRINCIPAL
AGREEMENT") made between (1) NORTHERN ROCK PLC (the "SELLER"), (2)
GRANITE FINANCE TRUSTEES LIMITED (the "MORTGAGES TRUSTEE") (3) GRANITE
FINANCE FUNDING LIMITED ("FUNDING") and (4) THE BANK OF NEW YORK (the
"SECURITY TRUSTEE").
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. We hereby send this notice pursuant to and in accordance with Clause [8.4
(Repurchase)/8.5 (Repurchase of Product Switches and Further Advances)]*
of the Principal Agreement, upon receipt of which you as [the Seller/the
Mortgages Trustee]* will be required to [repurchase from us/re-sell to
us]* the Mortgage Loan and Related Security set out in the attached
schedule in accordance with the terms of Clause 8 (Repurchase) of the
Principal Agreement on [insert date].
Signed for and on behalf of )
[GRANITE FINANCE TRUSTEES )
LIMITED/NORTHERN ROCK PLC] )
by: )
________________________________
* Delete as appropriate
53
SCHEDULE
1 2 3 4
ACCOUNT NO. PROPERTY ADDRESS NAME(S) DATE OF MORTGAGE
COMPLETION
54
SCHEDULE 8
FORM OF NOTIFICATION TO BORROWERS
[To: Borrower]
Dear Sirs,
NORTHERN ROCK
ACCOUNT NO.[ ]
We hereby notify you that on [ ] 2001, Northern Rock agreed
to sell your mortgage to Granite Finance Trustees Limited.
[Additional text will be allowed with Mortgages Trustee's and Security
Trustee's consent]
Yours faithfully,
NORTHERN ROCK PLC
55
SCHEDULE 9
OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE LOANS)
To: Northern Rock plc
Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
From: Granite Finance Trustees Limited
00 Xxxxxxxxx Xxxxxx
Xx Xxxxxx
Xxxxxx
Xxxxxxx Xxxxxxx
XX0 0XX
Date: [ ]
Pursuant to Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans) of the
mortgage sale agreement dated 26 March 2001 made between (1) Northern Rock plc,
(2) Granite Finance Funding Limited, (3) Granite Finance Trustees Limited and
(4) The Bank of New York (as amended, varied, supplemented or novated from
time to time the "AGREEMENT") we hereby offer to re-sell to you the Mortgage
Loan(s) together with their Related Security, details of which are set out in
the attached print out, if such Mortgage Loan(s) become Re-Fixed Mortgage Loans
within 3 months of the expiry of the relevant initial fixed rate periods
applicable to that/those Mortgage Loans. If you wish to do so, please accept
this offer by payment to us of the consideration for the repurchase of the
relevant Mortgage Loan(s) and Related Security in accordance with Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans) of the Agreement if such Mortgage
Loan(s) become Re-Fixed Mortgage Loans within 3 months of the expiry of the
relevant initial fixed rate periods applicable to that/those Mortgage Loans.
Capitalised terms used in this notice and not defined herein have the meanings
given to them in the Agreement.
Signed by or on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
as Seller )
[acting as its attorney NORTHERN ROCK PLC:] )
________________________________
56
SCHEDULE 10
POWER OF ATTORNEY IN FAVOUR OF
THE MORTGAGES TRUSTEE, FUNDING AND THE SECURITY TRUSTEE
THIS DEED OF POWER OF ATTORNEY is made on the 27 January 2003 by:
(1) NORTHERN ROCK PLC whose registered office is at Xxxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (registered number 3273685) in its
capacity as Seller,
in favour of each of:
(2) GRANITE FINANCE TRUSTEES LIMITED whose registered office is at 00
Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel Islands (registered
number 79309) in its capacity as Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED, acting out of its branch office
established in England (registered overseas company number FC022999 and
branch number BR005916) at 0xx Xxxxx, 00 Xxx Xxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxx XX0X 0XX; and
(4) THE BANK OF NEW YORK a New York Banking Corporation whose London branch
address is at Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX in its
capacity as Security Trustee.
WHEREAS:
(A) By virtue of a mortgage sale agreement (the "MORTGAGE SALE AGREEMENT")
dated 26 March 2001 and as subsequently amended, and made between (1) the
Seller, (2) the Mortgages Trustee (3) Funding and (4) the Security
Trustee, provision was made for the execution by the Seller of this Power
of Attorney.
(B) The provisions of the Master Definitions Schedule as amended and restated
by (and appearing in Appendix 1 to) the Master Definitions Schedule
Fourth Amendment and Restatement Deed made on 27 January 2003 between,
among others, the Seller, Funding and the Mortgages Trustee (as the same
have been and may be amended, varied or supplemented from time to time
with the consent of the parties hereto) are expressly and specifically
incorporated into and shall apply to this Deed.
NOW THIS DEED WITNESSETH:
1. The Seller irrevocably and by way of security for the performance of the
covenants, conditions and undertakings on the part of the Seller
contained in the Mortgage Sale Agreement and the Administration Agreement
HEREBY APPOINTS each of Funding, the Mortgages Trustee and the Security
Trustee (each an "ATTORNEY") and any receiver and/or administrator
appointed from time to time in respect of Funding and/or the Mortgages
Trustee or their assets severally to be its true and lawful attorney for
the Seller and in the Seller's
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name or otherwise to do any act, matter or thing which any Attorney
considers necessary for the protection or preservation of that Attorney's
interest in the Mortgage Loans, the Mortgages, the Mortgage Deeds and
their Related Security or which ought to be done under the covenants,
undertakings and provisions contained in the Mortgage Sale Agreement
including (without limitation) any or all of the following that is say:
(a) to exercise its rights, powers and discretions under the Mortgage
Loans, the Mortgages, the Mortgage Deeds and the Related Security
including the right to fix the rate or rates of interest payable
under the Mortgage Loans in accordance with the terms thereof
(including whilst such Mortgage Loans subsist and subject to the
consent of the Mortgages Trustee being given to the setting of
such rates, setting the Standard Variable Rate of the Seller, such
other discretionary rates and margins applicable to the Mortgage
Loans and (other than in respect of the Security Trustee) the rate
of (and terms relating to) the Existing Borrowers' Re-Fix Rate in
the circumstances referred to in Clause 4 (Interest Rates) of the
Administration Agreement provided that nothing in this Clause
shall prevent the Seller (or any of its attorneys from time to
time) from setting higher rates (and in the case of the Existing
Borrowers' Re-Fix Rate, imposing terms more advantageous to the
Mortgages Trustee) than those set or to be set or required or to
be required by the Mortgages Trustee or Funding under this power
of attorney;
(b) to exercise all the powers exercisable by the Seller by reason of
its remaining for the time being the registered owner at H.M. Land
Registry of any of the Mortgage Loans, the Mortgages, the Mortgage
Deeds and the Related Security and in particular, but without
prejudice to the generality of the foregoing, to make Further
Advances to Borrowers;
(c) to demand, xxx for and receive all moneys due or payable under the
Mortgage Loans, the Mortgages, the Mortgage Deeds and the Related
Security or any such collateral security or related rights;
(d) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) a conveyance or transfer of the Mortgage
Loans, the Mortgages, the Mortgage Deeds and the Related Security
or any of them to the Mortgages Trustee and its successors in
title or other person or persons entitled to the benefit thereof;
(e) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) a conveyance, assignment or transfer of
the Related Security or any item comprised therein (to the extent
only that such item or items relate to the Mortgage Loans) to the
Mortgages Trustee and its successors in title or other person or
persons entitled to the benefit thereof or entitled to be
registered at H.M. Land Registry as proprietor thereof (as the
case may be);
(f) to discharge the Mortgages or the Related Security or any of them
and to sign, seal, deliver and execute such receipts, releases,
surrenders, instruments and deeds as may
58
be required or advisable in order to discharge the relevant
Mortgaged Property or Properties from the Mortgages or any of
them; and
(g) to do every other act or thing which the Seller is obliged to do
under the Mortgage Sale Agreement or which that Attorney may
otherwise consider to be necessary proper or expedient for fully
and effectually vesting or transferring the interests sold
thereunder in the Mortgage Loans, the Mortgages, the Mortgage
Deeds and their Related Security or any or each of them and/or the
Seller's estate right and title therein or thereto in the
Mortgages Trustee and its successors in title or other person or
persons entitled to the benefit thereof (as the case may be) in
the same manner and as fully and effectually in all respects as
the Seller could have done.
2. Each Attorney shall have the power by writing under its hand by an
officer of the Attorney from time to time to appoint a substitute who
shall have power to act on behalf of the Seller as if that substitute
shall have been originally appointed Attorney by this deed (including,
without limitation, the power of further substitution) and/or to revoke
any such appointment at any time without assigning any reason therefor.
3. The laws of England shall apply to this deed and the interpretation
thereof and to all acts of the Attorney carried our or purported to be
carried out under the terms hereof.
4. The Seller hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorneys shall lawfully do or cause
to be done in and concerning the Mortgage Loans, the Mortgages or the
Mortgage Deeds or their Related Security by virtue of this deed.
IN WITNESS whereof the Seller has executed this document as a deed the day and
year first before written.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed in the presence of: )
________________________________
Authorised Signatory
Name:
Title:
________________________________
Authorised Signatory
Name:
Title:
59
SCHEDULE 11
LENDING CRITERIA
GENERAL
To proceed with obtaining a Mortgage Loan, each prospective Borrower completes
an application form which includes information with respect to the applicant's
income from all sources, current employment details, bank account information
(where the Borrower has a bank account), current mortgage information (if
applicable) and certain other personal information. A credit reference agency
search is made against each Borrower at their current address and, if
necessary, former addresses, in all cases which will give details of any public
information which includes county court judgements and details of any
bankruptcy.
EMPLOYMENT DETAILS
The Seller operates the following policy in respect of the verification of
Borrower income details. Under this policy, Borrowers are categorised as either
"employed" or "self-employed" by the Seller.
Proof of income for employed prospective Borrowers may be established by:
(a) two current cumulative monthly payslips or, if paid weekly, the last
three consecutive payslips; or
(b) Form P60, or employer's reference, with evidence of continued employment.
Proof of income for self-employed prospective Borrowers may be established by:
(a) a letter from the Borrower's accountant in acceptable form; or
(b) acceptable confirmation of self-employment which might include any of a
tax return, accountant's letter or a trade invoice, together with a
certificate from the Borrower as to income.
For certain Mortgage Loan products, particularly those that may involve larger
maximum loan amounts or higher loan to value ("LTV") ratios, the Seller
generally will require an acceptable accountant's letter or audited accounts.
INCOME CAPACITY
The following maximum income multiples are applied in determining the amount of
the Mortgage Loan:
(a) Single applicant- 3.50 times gross income for all Mortgage Loans (other
than Together Mortgage Loans); 3.80 times gross income for Together
Mortgage Loans.
60
(b) Joint applicants - a sum equal to: (1) the higher of 2.75 times the joint
gross income of the applicants (3.00 times joint gross income for
Together Mortgage Loans), or 3.50 times the highest earning applicant's
gross income (3.80 times the highest joint gross income for Together
Mortgage Loans) plus (2) the gross income of the other applicant.
VALUATION
The Seller requires that a valuation of the Mortgaged Property be obtained
either from its in-house valuation department or from an independent firm of
professional valuers selected from a panel of approved valuers. Details of
professional indemnity insurance held by panel valuers are kept by the Seller.
All valuations of Properties are reviewed by the person underwriting the
Mortgage Loan and/or the valuation team.
PROPERTY TYPES
The Seller applies the criteria set out below in determining the eligibility of
Properties to serve as security for Mortgage Loans. Under these criteria,
eligible property types include freehold and leasehold houses, leasehold flats
and mixed commercial and residential use properties where there is a separate
entrance for the residential part of the Mortgaged Property. In the case of a
Mortgage Loan secured by a leasehold property, the Seller requires that the
unexpired term of the lease be at least 30 years from the end of the agreed
mortgage term, with a minimum remaining term of 50 years from the beginning of
the mortgage term.
Certain property types falling outside the criteria may be considered on a case
by case basis. However, certain property types will not be considered for the
purposes of providing security for a Mortgage Loan. The types of property
falling within this category comprise freehold flats, shared ownership or
shared equity schemes and properties of non-standard construction of a type
considered to be defective.
LOAN AMOUNT
Generally, the maximum loan amount is {pound-sterling}500,000, but this varies
according to the application in question. In exceptional cases, this limit may
be exceeded.
TERM
Each Mortgage Loan must have an initial term of between 7 and 35 years.
AGE OF APPLICANT
All Borrowers in respect of non-Together Mortgage Loans must be aged 18 or
over. All Borrowers in respect of Together Mortgage Loans must be aged 21 or
over. There are no maximum age limits.
DISCRETION TO LEND OUTSIDE LENDING CRITERIA
On a case-by-case basis, and within approved limits as detailed in the Seller's
lending policy, the Seller may have determined that, based upon compensating
factors, a prospective Borrower who did
61
not strictly qualify under its lending criteria warranted an underwriting
exception. Compensating factors may include, but are not limited to, a low LTV
ratio, stable employment and time in residence at the applicant's current
residence.
MAXIMUM LOAN TO VALUE
For Mortgage Loans up to {pound-sterling}250,000, the maximum LTV ratio
permitted is 95 per cent. of the current market value of the Mortgaged Property
determined by the valuation. For Mortgage Loans up to {pound-sterling}400,000
the maximum LTV ratio permitted is 90 per cent. of the current market value of
the Mortgaged Property determined by relevant valuation. For Mortgage Loans of
over {pound-sterling}400,000 the maximum LTV ratio permitted is 85 per cent. of
the current market value of the Mortgaged Property determined by valuation.
MIG
It is a condition of each Mortgage Loan having an LTV ratio in excess of 75 per
cent. that the Seller take out mortgage indemnity insurance with Northern Rock
Mortgage Indemnity Company Limited ("NORMIC"). Such insurance is intended to
provide limited cover in the event of losses being incurred following
repossession and sale of a Mortgaged Property from a Borrower in default. The
premium is paid by the Seller. The indemnity insurance covers only a portion
of the relevant loss and is subject to a cap (both per-Mortgage Loan and on an
aggregate basis) on claims that may be made in respect of Mortgage Loans
originated in any one year. The policy will not cover all losses suffered in
relation to the Mortgage Loans.
62
SCHEDULE 12
STANDARD DOCUMENTATION
DOC NO.DOCUMENT PERIOD IN USE
1. (a) NRBS Mortgage Offer - General Conditions 01/07/95 to 31/12/95
(b)NRBS Mortgage Offer - General Conditions 01/01/96 to 30/11/96
(c)NRBS Mortgage Offer - General Conditions 01/12/96 to 30/09/97
2. NRBS Mortgage Deed 01/07/95 to 30/09/97
3. NRBS Mortgage Conditions Booklet 1995 01/07/95 to 30/09/97
4. (a)NR plc Mortgage Offer - General Conditions 01/10/97 to 31/12/97
(b)NR plc Mortgage Offer - General Conditions 01/12/97 to 31/12/97
(c)NR plc Mortgage Offer - General Conditions 01/01/98 to 31/05/98
(d)NR plc Mortgage Offer - General Conditions 01/06/98 to 31/12/98
(e)NR plc Mortgage Offer - General Conditions 01/01/99 to present
5. NRBS/NR plc Transitional Mortgage Deed 01/07/97 to 01/10/97
6. NR plc Mortgage Deed 01/10/97 to present
7. NR plc Mortgage Conditions 1997 01/10/97 to present
8. NR plc "Together" Mortgage Deed 01/04/99 to present
9. Discounted Mortgage Brochures
10. Discounted Mortgage Special Conditions
11. Cashback Mortgage Brochures
12. Cashback Mortgage Special Conditions
13. Fixed Rate Mortgage Brochures
14. Fixed Rate Mortgage Special Conditions
15. Together Mortgage Brochures
16. Together Mortgage Special Conditions
63
EXECUTION PAGE
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
________________________________
Authorised Signatory
Title:___________________
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
________________________________
Director/Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
________________________________
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
________________________________
Authorised Signatory
Name:
Title:
64
APPENDIX A
THE INITIAL MORTGAGE LOAN PORTFOLIO
ACCOUNT NO PROPERTY ADDRESS NAME OF BORROWER(S) DATE OF MORTGAGE COMPLETION CURRENT BALANCE
65
