Exhibit 4.2.1
FURTHER AMENDED AND RESTATED
MORTGAGES TRUST DEED
DATED [o] 2008
ABBEY NATIONAL PLC
AND
XXXXXX FUNDING LIMITED
AND
XXXXXX TRUSTEES LIMITED
AND
WILMINGTON TRUST SP SERVICES (LONDON) LIMITED
CONTENTS
CLAUSE PAGE
1. Definitions and Construction.........................................2
2. Creation of Mortgages Trust..........................................3
3. Conditions Precedent.................................................4
4. Acquisition by Funding of an Increased Interest in the
Trust Property.......................................................4
5. Acquisition by Seller of an Interest Relating to Capitalised
Interest.............................................................6
6. Payment by the Seller to Funding of the amount outstanding under
an Intercompany Loan.................................................7
7. Initial Funding Share and Initial Seller Share.......................8
8. Adjustment of Funding Share Percentage and Seller Share
Percentage on Distribution Dates.....................................8
9. Minimum Seller Share................................................12
10. Allocation and Distribution of Revenue Receipts.....................13
11. Allocation and Distribution of Mortgages Trust Available
Principal Receipts..................................................14
12. Allocation of Losses................................................17
13. Ledgers.............................................................17
14. Costs and Expenses of the Mortgages Trustee.........................17
15. Directions from Beneficiaries.......................................18
16. Early Termination of the Mortgages Trust............................18
17. Transfers...........................................................19
18. Covenants of the Mortgages Trustee..................................19
19. Power to Delegate...................................................20
20. Powers of Investment................................................21
21. Other Provisions Regarding the Mortgages Trustee....................21
22. No Retirement of Mortgages Trustee..................................22
23. Termination.........................................................22
24. Further Assurances..................................................22
25. Amendments, Etc.....................................................22
26. Non Petition Covenant...............................................23
27. No Partnership or Agency............................................23
28. Calculations........................................................23
29. No Waiver; Remedies.................................................23
30. Severability........................................................23
31. Counterparts........................................................23
32. Confidentiality.....................................................24
33. Exclusion of Third Party Rights.....................................24
34. Addresses for Notices...............................................25
35. Governing Law and Submission to Jurisdiction........................25
THIS FURTHER AMENDED AND RESTATED MORTGAGES TRUST DEED is made on [o] 2008
BETWEEN:
(1) ABBEY NATIONAL PLC (registered number 2294747), a public limited
company incorporated under the laws of England and Wales whose
registered office is at Abbey National House, 0 Xxxxxx Xxxxxx,
Xxxxxx'x Xxxxx, Xxxxxx XX0 0XX in its capacity as Seller, Beneficiary
and Cash Manager;
(2) XXXXXX FUNDING LIMITED (registered number 3982428), a private limited
company incorporated under the laws of England and Wales whose
registered office is at Abbey National House, 0 Xxxxxx Xxxxxx,
Xxxxxx'x Xxxxx, Xxxxxx XX0 0XX in its capacity as a Beneficiary;
(3) XXXXXX TRUSTEES LIMITED (registered number 3982431), a private limited
company incorporated under the laws of England and Wales whose
registered office is at Abbey National House, 0 Xxxxxx Xxxxxx,
Xxxxxx'x Xxxxx, Xxxxxx XX0 0XX in its capacity as Mortgages Trustee;
and
(4) WILMINGTON TRUST SP SERVICES (LONDON) LIMITED (registered number
2548079), a private limited company incorporated under the laws of
England and Wales whose registered office is at Tower 42,
International Finance Centre, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX.
WHEREAS:
(A) Wilmington Trust SP Services (London) Limited (formerly known as SPV
Management Limited) agreed to constitute the Mortgages Trust in favour
of Funding and the Seller on the terms and subject to the conditions
set out in the Mortgages Trust Deed dated 25th July, 2000 (as amended
and/or restated from time to time, the MORTGAGES TRUST DEED).
(B) The Mortgages Trustee agreed to hold the Trust Property as trustee for
the Beneficiaries upon, with and subject to the trusts, powers and
provisions of the Mortgages Trust Deed.
(C) The Seller carries on the business of, inter alia, originating
residential first mortgage loans to individual Borrowers in England,
Wales and Scotland and of managing and administering such mortgage
loans. The Seller assigned an initial portfolio of such mortgage loans
on 26th July, 2000 and new portfolios of such mortgages loans on
subsequent dates to the Mortgages Trustee pursuant to the Mortgage
Sale Agreement, which portfolio is held by the Mortgages Trustee as
trustee for the Beneficiaries upon, with and subject to the trusts,
powers and provisions of the Mortgages Trust Deed.
(D) On 29th November, 2000 the parties to the Mortgages Trust Deed agreed
to amend the terms of the Mortgages Trust Deed as set out in an
Amendment Agreement to the Mortgages Trust Deed to provide for
repayment by Funding of its obligations in respect of certain term
advances known as Scheduled Amortisation Term Advances.
(E) On 23rd May, 2001 the parties to the Mortgages Trust Deed again agreed
to amend the terms of the Mortgages Trust Deed as set out in the
Second Deed of Amendment to the Mortgages Trust Deed to exclude
application of the Trustee Xxx 0000.
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(F) On 5th July, 2001 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(G) On 8th November, 2001 the parties to the Mortgages Trust Deed agreed
to amend and restate the terms of the Mortgages Trust Deed as set out
in the Amended and Restated Mortgages Trust Deed of the same date.
(H) On 7th November, 2002 the parties to the Mortgages Trust Deed agreed
to amend and restate the terms of the Mortgages Trust Deed as set out
in the Amended and Restated Mortgages Trust Deed of the same date.
(I) On 26th March, 2003 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(J) On 1st April, 2004 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(K) On 8th December, 2005 the parties to the Mortgages Trust Deed agreed
to amend and restate the terms of the Mortgages Trust Deed as set out
in the Amended and Restated Mortgages Trust Deed of the same date.
(L) On 28th November, 2006 the parties to the Mortgages Trust Deed agreed
to amend and restate the terms of the Mortgages Trust Deed as set out
in the Amended and Restated Mortgages Trust Deed of the same date.
(M) On 20th June, 2007 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(N) The parties to the Mortgages Trust Deed have again agreed to amend and
restate the terms of the Mortgages Trust Deed as set out herein.
NOW THIS DEED WITNESSES:
1. DEFINITIONS AND CONSTRUCTION
1.1 The Fourth Amended and Restated Master Definitions and Construction
Schedule and the Fourth Amended and Restated Master Issuer Master
Definitions and Construction Schedule signed for the purposes of
identification by Xxxxx & Xxxxx LLP and Xxxxxxxxx and May on [o] 2008
(as the same may be amended, varied or supplemented from time to time)
are expressly and specifically incorporated into this Deed and,
accordingly, the expressions defined in the Fourth Amended and
Restated Master Definitions and Construction Schedule and the Fourth
Amended and Restated Master Issuer Master Definitions and Construction
Schedule (as so amended, varied or supplemented from time to time)
shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Deed,
including the Recitals hereto and this Deed shall be construed in
accordance with the interpretation provisions set out in Clause 2 of
the Fourth Amended and Restated Master Definitions and Construction
Schedule and Clause 2 of the Fourth Amended and Restated Master Issuer
Master Definitions and Construction Schedule. In the event of a
conflict between the Fourth Amended and Restated Master Definitions
and Construction Schedule and the Fourth Amended and Restated Master
Issuer Master Definitions and
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Construction Schedule, the Fourth Amended and Restated Master Issuer
Master Definitions and Construction Schedule shall prevail.
1.2 This Deed amends and restates the Mortgages Trust Deed made on 25th
July, 2000 between the parties hereto as amended on 29th November,
2000 and 23rd May, 2001 and amended and restated on 5th July, 2001,
8th November, 2001, 7th November, 2002, 26th March, 2003, 1st April,
2004, 8th December, 2005, 28th November, 2006, 20th June, 2007, and
[o] 2008 (the PRINCIPAL DEED). As of the date of this Deed, any future
rights or obligations (excluding such obligations accrued to the date
of this Deed) of a party under the Principal Deed shall be
extinguished and shall instead be governed by this Deed.
2. CREATION OF MORTGAGES TRUST
2.1 INITIAL TRUST PROPERTY
On 25th July, 2000 Wilmington Trust SP Services (London) Limited
(formerly known as SPV Management Limited) settled on trust the sum of
[POUND]100 (one hundred pounds) (the INITIAL TRUST PROPERTY) to be
held on trust absolutely as to both capital and income by the
Mortgages Trustee for the benefit, as tenants in common, of the Seller
as to the Initial Seller Share Percentage and Funding as to the
Initial Funding Share Percentage.
2.2 INITIAL CLOSING TRUST PROPERTY
Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
assigned the Initial Closing Trust Property on the Initial Closing
Date.
2.3 FUTURE TRUST PROPERTY
From time to time and pursuant to the Mortgage Sale Agreement, the
Seller has assigned and intends to assign Future Trust Property to the
Mortgages Trustee.
2.4 TRUST PROPERTY
Subject to Clause 3, the Mortgages Trustee shall hold the Trust
Property as to both capital and income on trust absolutely for Funding
(as to the Funding Share Percentage) and for the Seller (as to the
Seller Share Percentage) as beneficial tenants in common upon, with
and subject to all the trusts, powers and provisions of this Deed.
2.5 OTHER TRUST PROPERTY
The TRUST PROPERTY means the Initial Trust Property, the Initial
Closing Trust Property, the Closing Trust Property and any Future
Trust Property and shall also include:
(a) any increase in the Outstanding Principal Balance of the Loans
in the Portfolio due to Capitalised Interest, Capitalised
Expenses, Capitalised Arrears, or a Borrower making drawings
under Flexible Loans, taking into account any adjustments (but
not deemed adjustments) as set out in Clause 8.4;
(b) any Revenue Receipts and Principal Receipts on the Loans in
the Portfolio prior to their distribution pursuant to Clause
10 (Allocation and Distribution of Revenue Receipts) and
Clause 11 (Allocation and Distribution of Mortgages Trust
Available Principal Receipts) respectively;
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(c) any other amounts received under or in respect of the Loans
and their Related Security on or after the Programme Date
(excluding Third Party Amounts), including the proceeds of any
sale of the Loans and their Related Security and any proceeds
of sale of any other Trust Property;
(d) rights under any insurance policies of which the Mortgages
Trustee has the benefit;
(e) amounts on deposit in the Mortgages Trustee GIC Account and
interest earned thereon; and
(f) any other property representing Initial Trust Property, Future
Trust Property or (a) to (e) above from time to time.
3. CONDITIONS PRECEDENT
3.1 The Initial Trust Property is held by the Mortgages Trustee on the
Mortgages Trust.
3.2 The Initial Closing Trust Property shall be held by the Mortgages
Trustee on the Mortgages Trust upon the satisfaction of the following
conditions precedent:
(a) due execution and delivery of the Mortgage Sale Agreement by
all parties to it;
(b) due execution and delivery of this Deed by all parties to it;
and
(c) payment by Funding to the Seller of the Initial Consideration
on account of and in satisfaction of the Mortgages Trustee's
obligations under Clause 4.4 of the Mortgage Sale Agreement.
3.3 Any Future Trust Property shall be held by the Mortgages Trustee on
the Mortgages Trust subject to satisfaction of the conditions set out
in Clause 4.1 of the Mortgage Sale Agreement for the transfer of New
Loans and their New Related Security to the Mortgages Trustee.
4. ACQUISITION BY FUNDING OF AN INCREASED INTEREST IN THE TRUST PROPERTY
4.1 OFFER TO ASSIGN AND CONDITIONS TO ASSIGNMENT
On not more than 60 nor less than 30 days' written notice, Funding may
offer to make a payment to the Seller to acquire an interest in the
Trust Property with the effect of increasing the Funding Share and to
cause a corresponding decrease in the Seller Share on the Distribution
Date specified in that notice. Such offer shall only be valid if the
following conditions precedent are satisfied on the Distribution Date:
(a) the Principal Deficiency Ledger does not have a debit balance
(which remains outstanding) as at the most recent Interest
Payment Date;
(b) no Note Event of Default or Intercompany Loan Event of Default
shall have occurred which is continuing or unwaived as at the
relevant Distribution Date;
(c) the Security Trustee is not aware that the proposed
acquisition would adversely affect the then current credit
ratings by the Rating Agencies (or any of them) of the Notes;
(d) the relevant Notes have been issued by the relevant Issuer,
the subscription proceeds received on behalf of the relevant
Issuer and advanced by the relevant Issuer to
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Funding pursuant to an Intercompany Loan Agreement, the
proceeds of which will be applied by Funding to make the
payment referred to in the notice on the relevant Distribution
Date;
(e) Funding has entered into, if necessary, a New Start-up Loan,
any new variable rate swap, new fixed floating rate swap and a
new tracker rate swap and adjustments have been made, if
required, to the First Reserve Fund and the Second Reserve
Fund;
(f) receipt of a solvency certificate from the Seller in form and
content acceptable to the Mortgages Trustee, Funding and the
Security Trustee;
(g) as at the relevant Distribution Date, the aggregate
Outstanding Principal Balance of Loans comprised in the Trust
Property, in respect of which the aggregate amount in arrear
is more than three times the monthly payment then due, is less
than 4 per cent. of the aggregate Outstanding Principal
Balance of all Loans comprised in the Trust Property;
(h) unless otherwise agreed by Xxxxx'x, Standard and Poor's or
Fitch, as the case may be, the short term, unsecured,
unguaranteed and unsubordinated debt obligations of the Seller
are rated at least P-1 by Xxxxx'x, A-1 by Standard and Poor's
and F1 by Fitch at the time of, and immediately following, the
proposed acquisition;
(i) the product of the WAFF and WALS for the Loans comprised in
the Trust Property calculated on the relevant Distribution
Date in the same way as for the Initial Portfolio (or as
agreed by the Servicer and the Rating Agencies from time to
time) does not exceed the product of the WAFF and WALS for the
Loans comprised in the Trust Property calculated on the most
recent previous Closing Date, plus 0.25 per cent.;
(j) the Xxxxx'x Portfolio Variation Test of the Loans in the
Portfolio as calculated on the relevant Distribution Date,
does not exceed the most recently determined Xxxxx'x
Portfolio Variation Test Value as calculated in relation
to the Loans in the Portfolio as at the most recent date
on which Xxxxx'x performed a full pool analysis on the
Portfolio (not to be less frequent than annually) plus 0.3
per cent.; and
(k) the First Reserve Fund has not been debited on or before the
relevant Distribution Date for the purposes of curing a
Principal Deficiency in respect of the Term Advances in
circumstances where the First Reserve Fund has not been
replenished by a corresponding amount by the relevant
Distribution Date.
Funding may not offer to make a payment to the Seller in consideration
for an increase in the Funding Share after any Interest Payment Date
on which any Issuer (including any New Issuer) does not exercise its
option to redeem the Notes or any New Notes issued by it pursuant to
the Terms and Conditions of such Notes or, as the case may be, any New
Notes (but only where such right of redemption arises on or after a
particular specified date and not as a result of the occurrence of any
event specified in the Terms and Conditions).
4.2 COMPLETION OF ASSIGNMENT
Subject to satisfaction of the conditions precedent set out in Clause
4.1 above and to acceptance of that offer by the Seller, Funding shall
pay to the Seller an amount equal to the increase in the Funding Share
and, on the date of such payment, the Funding Share shall increase by
a corresponding amount, and the Seller Share shall decrease by the
same amount in accordance with Clause 8.3 and Clause 8.6 below.
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4.3 AUDIT OF LOANS CONSTITUTING THE TRUST PROPERTY
If the short term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller fall below A-1 by Standard & Poor's, P-1 by
Xxxxx'x and/or F1 by Fitch, then the Beneficiaries shall appoint a
firm of independent auditors (approved by the Rating Agencies) to
determine whether the Loans and their Related Security (or any part of
them) constituting the Trust Property complied with the
representations and warranties set out in Schedule 1 of the Mortgage
Sale Agreement as at the date such Loans were assigned to the
Mortgages Trustee. The costs of such independent auditors shall be
borne by the Beneficiaries pro rata according to their respective
current percentage shares in the Trust Property.
4.4 TAX
(a) Any payment by Funding to the Seller to acquire an interest in the
Trust Property shall be inclusive of any amount in respect of
applicable VAT (if any).
(b) Any stamp duty, stamp duty land tax or stamp duty reserve tax in
respect of any acquisition of Trust Property shall be payable by the
Seller.
5. ACQUISITION BY SELLER OF AN INTEREST RELATING TO CAPITALISED INTEREST
5.1 Any increase in the Outstanding Principal Balance due to Capitalised
Arrears, Capitalised Expenses, Capitalised Interest or a Borrower
making drawings under Flexible Loans will be allocated to the Funding
Share and to the Seller Share, based on respectively the Funding Share
Percentage and the Seller Share Percentage in the Trust Property as
calculated on the previous Distribution Date.
5.2 Prior to an Insolvency Event occurring in respect of the Seller, on
each Distribution Date the Seller shall make a cash payment to Funding
in an amount equal to Funding's share of the Capitalised Arrears,
Capitalised Expenses, Capitalised Interest and/or a Borrower making
drawings under Flexible Loans allocated to Funding under Clause 5.1
above arising since the last Distribution Date in respect of those
Loans that are subject to Payment Holidays or Underpayments. In
consideration for the making of such payment the Seller Share will
increase by an amount equal to the amount paid to Funding for Funding's
share of the Capitalised Arrears, Capitalised Expenses, Capitalised
Interest and/or a Borrower making drawings under Flexible Loans, as
applicable, and the Funding Share will decrease by a corresponding
amount and the Seller Share Percentage and the Funding Share Percentage
shall be adjusted accordingly. The cash payment shall be made in
accordance with Clause 5.4 below.
5.3 If an Insolvency Event occurs in respect of the Seller, then the
Seller may make payment to Funding in respect of its share of the
Capitalised Interest in the same manner as is contemplated in Clause
5.2, but it is not obliged to do so.
5.4 In respect of the cash payment to be made by the Seller pursuant to
Clause 5.2, the Seller hereby directs the Mortgages Trustee to deduct
from the Seller's share of the Mortgages Trust Available Revenue
Receipts (allocated to the Seller pursuant to Clause 10.2 of this
Deed) an amount equal to such cash payment and to pay the same to
Funding in satisfaction of the Seller's obligations under Clause 5.2.
To the extent that the Seller's share of the Mortgages Trust Available
Revenue Receipts is less than the amount required to be paid by it
pursuant to Clause 5.2, then the Seller shall pay an amount equal to
the shortfall directly to Funding from its own resources.
5.5 Any payment by the Seller pursuant to Clause 5.2 shall be exclusive of
any amount in respect of applicable VAT (which shall be paid by the
Seller in addition to payments made pursuant to Clause 5.2).
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6. PAYMENT BY THE SELLER TO FUNDING OF THE AMOUNT OUTSTANDING UNDER AN
INTERCOMPANY LOAN
6.1 CONDITIONS PRECEDENT TO ACCEPTANCE OF OFFER
Funding may accept any offer by the Seller to pay the amount
outstanding under any Series of Term Advances under an Intercompany
Loan, but only if:
(a) either:
(i) the Outstanding Principal Balance of the relevant
Series of Term Advances under the Intercompany Loan is
less than 10 per cent. of the Outstanding Principal
Balance of the Term Advances of that Series
immediately after the Term Advances were drawn; or
(ii) (A) an Issuer would be required to deduct or withhold
from any payment of principal or interest or any other
amount under any of the Issuer Notes any amount for or
on account of any present or future taxes, duties,
assessments or governmental charges of whatever
nature, or (B) Funding would be required to deduct or
withhold from amounts due under an Intercompany Loan
any amount on account of any present or future taxes,
duties, assessments or governmental charges of
whatever nature, and that Issuer is not able to
arrange the substitution of a company incorporated in
another jurisdiction approved by the relevant Note
Trustee as principal debtor under the relevant Notes
or as lender under the relevant Issuer Intercompany
Loan Agreement, as the case may be; or
(iii) an Issuer has delivered a certificate to Funding, the
relevant Issuer Security Trustee and the Rating
Agencies to the effect that it would be unlawful for
that Issuer to make, fund or allow to remain
outstanding a Term Advance made by it under the
relevant Intercompany Loan Agreement and stating that
that Issuer requires Funding to prepay the Term
Advance; or
(iv) (in relation to the Seventh Issuer Intercompany Loans
and the Eighth Issuer Intercompany Loans only) the new
Basel Capital Accord (as described in the consultative
document "The New Basel Capital Accord" published in
April 2003 by the Basel Committee on Banking
Supervision) has been implemented in the United
Kingdom, whether by the rule of law, recommendation of
best practices or by any other regulation, no Seventh
Issuer Note Enforcement Notice or Eighth Issuer Note
Enforcement Notice has been served, the offer by the
Seller is made on or after the Interest Payment Date
falling in April 2007 and the Seller has given not
more than 60 days, and not less than 30 days, notice
of making an offer;
(b) the Security Trustee has received written confirmation from
each of the Rating Agencies that there would not be any
adverse effect on the then current ratings of the Notes if
Funding accepted the offer;
(c) Funding would receive the payment from the Seller on a
Distribution Date (together with VAT, if payable); and
(d) Funding will, and is entitled under the terms of that
Intercompany Loan to, apply the proceeds of the payment to
repay the relevant Series of Term Advances under that
Intercompany Loan and the relevant Issuer has confirmed to
Funding that on the next
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succeeding Interest Payment Date for the corresponding classes
of Notes it will use the proceeds of the relevant payment to
repay the corresponding classes of Notes and that Issuer has
exercised its option to redeem the corresponding classes of
Notes.
6.2 ADJUSTMENT TO SHARES IF OFFER ACCEPTED
If Funding accepts the offer as described in Clause 6.1 above and the
Seller makes the appropriate payment on a Distribution Date, then, on
the date of such payment, the Funding Share shall decrease by an
amount corresponding to the amount paid by the Seller and the Seller
Share shall increase by the same amount in accordance with Clause 8.3
and Clause 8.6 below. The Seller Share Percentage and the Funding
Share Percentage shall be adjusted accordingly.
7. INITIAL FUNDING SHARE AND INITIAL SELLER SHARE
7.1 INITIAL FUNDING SHARE
The Funding Share at 25th July, 2000 was [POUND]35.25 and the Initial
Funding Share at the Initial Closing Date was [POUND]2,256,000,035.25.
The INITIAL FUNDING SHARE PERCENTAGE was the Initial Funding Share
expressed as a percentage of the Trust Property at the Initial Closing
Date, that is to say, 35.25 per cent.
7.2 INITIAL SELLER SHARE
As at 25th July, 2000, the Seller Share was [POUND]64.75. The INITIAL
SELLER SHARE was the sum which remained of the Trust Property at the
Initial Closing Date after deduction of the Initial Funding Share. The
INITIAL SELLER SHARE PERCENTAGE was equal to 100 per cent. minus the
Initial Funding Share Percentage, that is to say, 64.75 per cent. The
amount of the Initial Seller Share and the Initial Seller Share
Percentage was determined on the Initial Closing Date.
7.3 ROUNDING OF PERCENTAGE SHARES
Except for the Initial Closing Date (and unless otherwise agreed by
the Beneficiaries), the Funding Share Percentage and the Seller Share
Percentage shall be calculated to five decimal places.
8. ADJUSTMENT OF FUNDING SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE ON
DISTRIBUTION DATES
8.1 DISTRIBUTION
On each Distribution Date and on the date that the Mortgages Trust
terminates, excluding, for the avoidance of doubt, the Initial Closing
Date, the Funding Share Percentage and the Seller Share Percentage
will be recalculated by the Cash Manager (on behalf of the Mortgages
Trustee and the Beneficiaries) based on the aggregate Outstanding
Principal Balance of the Loans constituting the Trust Property (as
adjusted from time to time) as at the close of business on the London
Business Day immediately preceding that Distribution Date. On each
Distribution Date, the Mortgages Trustee will distribute Revenue
Receipts and Principal Receipts in accordance with Clauses 10 and 11
hereof.
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8.2 CURRENT FUNDING SHARE PERCENTAGE
On each Distribution Date and the date when the Mortgages Trust
terminates (in each case the RELEVANT DISTRIBUTION DATE), the CURRENT
FUNDING SHARE PERCENTAGE will be recalculated and will, in each case,
be an amount, expressed as a percentage (calculated to an accuracy of
three decimal places (rounded upwards)), equal to:
A - B - C + D + E + F - G/H x 100
where:
A = the Current Funding Share as at the immediately preceding
Distribution Date (or, in the case of the first Distribution
Date, the Initial Funding Share as at the Initial Closing
Date);
B = the amount of any Principal Receipts to be distributed to
Funding on that Relevant Distribution Date as calculated on
the immediately preceding Distribution Date in accordance with
the provisions described in Clause 11 below;
C = the amount of any Losses sustained on the Loans in the
immediately preceding Distribution Period and allocated to
Funding (based on the Funding Share Percentage thereof
calculated on the immediately preceding Distribution Date or,
in the case of the first Distribution Date, the Initial
Funding Share Percentage) in the Distribution Period
immediately preceding the Relevant Distribution Date and the
amount of any reductions occurring in respect of the Loans as
described in paragraph (a) of Clause 8.4 below allocated to
Funding in the Distribution Period immediately preceding the
Relevant Distribution Date;
D = an amount equal to any consideration (excluding Deferred
Consideration) to be paid by Funding to the Seller in relation
to any New Loans to be assigned to the Mortgages Trustee on
the Relevant Distribution Date;
E = an amount equal to any consideration (excluding Deferred
Consideration) to be paid by Funding to the Seller in relation
to any acquisition by Funding from the Seller on the Relevant
Distribution Date of an interest in the Trust Property;
F = an amount equal to the portion of any Capitalised Interest,
Capitalised Expenses, Capitalised Arrears accrued on the
Loans or a Borrower making drawings under Flexible Loans in the
Distribution Period immediately preceding the Relevant
Distribution Date which is allocated to the Funding Share in
accordance with Clause 5.1 less the amount of any payment to be
made by Seller to Funding pursuant to Clauses 5.2 or 5.3 as the
case may be, in respect of such portion of Capitalised
Interest, Capitalised Expenses Capitalised Arrears and/or
additional drawings under Flexible Loans;
G = an amount equal to any payment to be received by Funding from
the Seller in relation to any acquisition by the Seller from
Funding on such Distribution Date of an interest in the Trust
Property pursuant to an offer under Clause 6.1; and
H = the amount of the Retained Principal Receipts (if any) plus
the aggregate Outstanding Principal Balance of all the Loans
constituting the Trust Property as at the Relevant
Distribution Date after making the distributions, allocations
and additions referred to in (B), (C), (D), (E), (F) and (G)
above, and after taking account of (but without double
counting) (i) any distributions of Principal Receipts to be
made on that Distribution Date to Funding and the Seller as
calculated on the immediately
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preceding Distribution Date; (ii) the amount of any Losses
allocated to Funding and the Seller; (iii) any increase in the
Loan balances due to Capitalised Interest, Capitalised
Expenses and Capitalised Arrears or Borrowers taking Payment
Holidays making Underpayments or additional drawings under
Flexible Loans; (iv) the adjustments referred to in paragraphs
8.4(a) to 8.4(e) (inclusive) below (or if the Seller Share is
zero, the adjustments referred to in paragraph (a) only); and
(v) the amount of any other additions or subtractions to the
Trust Property during the immediately preceding Distribution
Period.
8.3 CURRENT FUNDING SHARE
The CURRENT FUNDING SHARE on each Distribution Date and on the date on
which the Mortgages Trust terminates will be an amount equal to:
A - B - C + D + E + F - G
where "A", "B", "C", "D", "E", "F" and "G" have the meanings specified
in Clause 8.2 above.
8.4 ADJUSTMENTS TO TRUST PROPERTY
On each Relevant Distribution Date the aggregate Outstanding Principal
Balance of the Loans comprised in the Trust Property shall be reduced
or, as the case may be, deemed to be reduced for the purposes of the
calculation set out in "H" above, if any of the following events has
occurred in the immediately preceding Distribution Period:
(a) any Borrower exercises a right of set-off in relation to Loans
constituting part of the Trust Property so that the amount of
principal and/or interest owing under a loan is reduced but no
corresponding amount is received by the Mortgages Trustee; in
which event the total amount of Trust Property shall be
reduced by an amount equal to the amount set-off; and/or
(b) a Loan or (as applicable) its Related Security (i) does not
comply with the Loan Warranties in the Mortgage Sale Agreement
or (ii) is the subject of a Product Switch or a Further
Advance or other obligation of the Seller to repurchase
(including, for the avoidance of doubt, any obligation to
repurchase pursuant to Clause 7.4 of the Mortgage Sale
Agreement), and if the Seller fails to repurchase the Loan or
Loans under the relevant Mortgage Account and their Related
Security as required by the terms of the Mortgage Sale
Agreement, then the Trust Property shall be deemed to be
reduced for the purposes of the calculation in "H" above by an
amount equal to the Outstanding Principal Balance of the
relevant Loan or Loans under the relevant Mortgage Account
together with Arrears of Interest and Accrued Interest; and/or
(c) the Seller would be required to repurchase a Loan and its
Related Security in accordance with the terms of the Mortgage
Sale Agreement, but such Loan and its Related Security are not
capable of repurchase, in which case the Trust Property shall
be deemed to be reduced for the purposes of the calculation in
"H" above by an amount equal to the Outstanding Principal
Balance of the relevant Loan or Loans under the relevant
Mortgage Account together with Arrears of Interest and Accrued
Interest; and/or
(d) the Seller materially breaches any other obligation or
warranty under the Mortgage Sale Agreement and/or (for so long
as it is the Servicer) the Servicing Agreement, which is also
grounds for terminating the appointment of the Servicer in
which event the aggregate Outstanding Principal Balance of
Loans constituting the Trust Property
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shall be deemed for the purposes of the calculation in "H"
above to be reduced by an amount equivalent to all losses,
costs, liabilities, claims, expenses and damages incurred by
the Beneficiaries as a result of such breach; and/or
(e) the Seller Share of Mortgages Trustee Revenue Receipts is less
than the Loss Amount (as defined in Clause 10.3) payable to
the Mortgages Trustee and/or Funding in accordance with Clause
10.3, in which case the Trust Property shall be deemed to be
reduced for the purposes of the calculation in "H" above by an
amount equal to the shortfall in the Loss Amount.
The reductions and deemed reductions set out in paragraphs 8.4(a),
8.4(b), 8.4(c), 8.4(d) and 8.4(e) above shall be made to the Seller
Share only (or for the purposes of calculating the Seller Share as the
case may be) until the Seller Share is zero and thereafter (in respect
of paragraph 8.4(a) only) shall be made to the Funding Share. If at,
or any time after the Initial Closing Date the Mortgages Trustee
holds, or there is held to its order, or it receives, or there is
received to its order, any property, interest, right or benefit
relating to any Loan or its Related Security which is or has been
subject to any matter described in Clause 8.4(a) the Mortgages Trustee
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 will hold such property, interest, right or
benefit and/or the proceeds thereof upon trust absolutely for the
Seller (separate from the Mortgages Trust).
8.5 CURRENT SELLER SHARE PERCENTAGE
On each Distribution Date and the date on which the Mortgages Trust
terminates, the CURRENT SELLER SHARE PERCENTAGE will be an amount
equal to:
100% - Current Funding Share Percentage (as calculated on the Relevant
Distribution Date).
8.6 CURRENT SELLER SHARE
The CURRENT SELLER SHARE on each Distribution Date and on the date on
which the Mortgages Trust terminates will be an amount equal to:
The Outstanding Principal Balance of all the Loans in the Trust
Property on the Relevant Distribution Date plus any retained Principal
Receipts (as adjusted in accordance with the calculation of "H" as set
out in Clause 8.2 above) MINUS the Current Funding Share (as
calculated on such Distribution Date).
8.7 FUNDING SHARE/SELLER SHARE
Neither the Funding Share nor the Seller Share may be reduced below
zero. At all times the Funding Share Percentage and the Seller Share
Percentage shall be equal to 100 per cent.
9. MINIMUM SELLER SHARE
9.1 INITIAL MINIMUM SELLER SHARE
The Seller Share includes an amount equal to the Minimum Seller Share.
Unless and until the Funding Share is in an amount equal to zero or an
Asset Trigger Event occurs, the Seller will not be entitled to receive
Principal Receipts which would reduce the Seller Share to an amount
less than the Minimum Seller Share and the Seller consents and directs
the Mortgages Trustee accordingly.
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9.2 FLUCTUATION OF MINIMUM SELLER SHARE ON EACH DISTRIBUTION DATE
On and from the Ninth Issuer Closing Date, the amount of the Minimum
Seller Share will be recalculated on each Distribution Date in
accordance with the following formula:
W + X + Y + Z + AA
where:
W = 100% of the aggregate cleared balances of all savings accounts
opened in respect of Flexible Plus Loans;
X = 4.0% of the aggregate Outstanding Principal Balance of all
Loans comprised in the Trust Property;
Y = the product of: (p x q) x r where:
p = 8%;
q = the FLEXIBLE DRAW CAPACITY, being an amount equal to
the excess of (i) the maximum amount that Borrowers
are entitled to draw under Flexible Loans included in
the Trust Property (whether or not drawn) over (ii)
the aggregate principal balance of actual Flexible
Loan advances made to Borrowers in the Trust Property
on the relevant Distribution Date (but excluding the
Initial Advances made thereunder); and
r = 3;
Z = the aggregate sum of the reductions or deemed reductions made
to the Seller Share pursuant to Clauses 8.4(b), 8.4(c), and
8.4(d) on that Distribution Date; and
AA = the aggregate entitlement of Borrowers to receive Delayed
Cashbacks and Reward Cashbacks in respect of the remaining
life of the Reward Loans in the Trust Property.
9.3 RECALCULATION OF MINIMUM SELLER SHARE FOLLOWING OCCURRENCE OF
EXCEPTIONAL EVENTS
The calculation of the Minimum Seller Share in accordance with Clause
9.2 above will be recalculated with the agreement of the parties
hereto, the Security Trustee and the Rating Agencies if the Seller
merges or otherwise combines its business with another bank or other
financial institution so as to increase the risks associated with
Borrowers holding deposits in Abbey accounts.
10. ALLOCATION AND DISTRIBUTION OF REVENUE RECEIPTS
10.1 ALLOCATION AND DISTRIBUTION OF THIRD PARTY AMOUNTS
Pursuant to the Cash Management Agreement, the Cash Manager (at the
direction of the Mortgages Trustee on behalf of the Beneficiaries at
their direction and with their consent) will deduct, as and when
identified, Third Party Amounts from the Revenue Receipts standing to
the credit of the Mortgages Trustee GIC Account, and pay over the same
to the proper recipients thereof. The Mortgages Trustee and the
Beneficiaries hereby consent to such deductions.
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10.2 ALLOCATION AND DISTRIBUTION OF MORTGAGES TRUSTEE AVAILABLE REVENUE
RECEIPTS
On each Distribution Date the Cash Manager (at the direction of the
Mortgages Trustee and on behalf of the Beneficiaries at their
direction and with their consent) will distribute Mortgages Trustee
Available Revenue Receipts as follows:
(a) firstly, in or towards satisfaction pari passu and pro rata
according to the respective amounts thereof of:
(i) any costs, charges, liabilities and expenses then due
or to become due to the Mortgages Trustee under the
provisions of this Deed together with VAT thereon as
provided herein (if payable); and
(ii) any amounts due and payable by the Mortgages Trustee
to third parties in respect of the Mortgages Trust and
incurred without breach by the Mortgages Trustee of
the documents to which it is a party (and for which
payment has not been provided for elsewhere),
including amounts due to H.M. Revenue and Customs or
any other taxation authority which has jurisdiction
over the Trust Property or the Mortgages Trustee in
respect of any stamp, issue, registration, documentary
and other fees, duties and taxes (including interest
and penalties) payable by the Mortgages Trustee in
connection with (i) the execution and delivery of this
Deed; (ii) any action to be taken by or on behalf of
the Mortgages Trustee to enforce or to resolve any
doubt concerning or, for any other purpose in relation
to, the Mortgages Trust Deed; and (iii) any such tax
which is primarily due from either or both of the
Seller and Funding in their capacities as
Beneficiaries (and, for the avoidance of doubt, only
in such capacities) in circumstances where the
Mortgages Trustee has made a payment of such tax (or
part thereof) by reason of a failure by the Seller or
Funding to discharge their primary liability in
respect of such tax;
(b) secondly, in or towards satisfaction of any remuneration then
due and payable to the Servicer and any costs, charges,
liabilities and expenses then due or to become due to the
Servicer under the provisions of the Servicing Agreement,
together with VAT thereon as provided therein; and
(c) thirdly, subject to Clause 10.3 below, to pay Funding and the
Seller their respective shares of any remaining Mortgages
Trustee Available Revenue Receipts, calculated by multiplying
the total amount of such remaining Mortgages Trustee Available
Revenue Receipts by the Current Funding Share Percentage
(calculated on the immediately preceding Distribution Date),
which product shall be allocated to Funding, and the remaining
Mortgages Trustee Available Revenue Receipts which shall be
allocated to the Seller (subject to deducting any amounts due
to the Mortgages Trustee and/or Funding by way of set-off
pursuant to Clause 7.3 of the Mortgage Sale Agreement).
10.3 If, as a result of any of the matters referred to in paragraphs (a) to
(g) inclusive of Clause 7.4 of the Mortgage Sale Agreement, the
Mortgages Trustee and/or Funding suffers or incurs any costs,
expenses, losses or other claims in connection with any recovery of
interest on the Loans to which the Seller, the Mortgages Trustee or
Funding was not entitled or could not enforce (referred to in this
Clause 10.3 as the LOSS AMOUNT), then:
(a) the Seller's share of Mortgages Trustee Revenue Receipts shall
be reduced by an amount equal to the Loss Amount; and
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(b) from the amount deducted from the Seller's share of the
Mortgages Trustee Revenue Receipts referred to in paragraph
(a) above:
(i) an amount will be paid to the Mortgages Trustee equal
to the Loss Amount incurred by the Mortgages Trustee;
and
(ii) an amount will be paid to Funding equal to the Loss
Amount incurred by Funding.
11. ALLOCATION AND DISTRIBUTION OF MORTGAGES TRUST AVAILABLE PRINCIPAL
RECEIPTS
11.1 CALCULATION OF PRINCIPAL RECEIPTS:
On each Relevant Distribution Date, prior to distributing the
Mortgages Trust Available Principal Receipts, the Cash Manager shall
ascertain:
(a) the amount of Mortgages Trust Available Principal Receipts:
(b) whether the Cash Accumulation Period has started or would
start during the immediately succeeding Distribution Period in
respect of any Bullet Term Advance or any applicable Series 1
Term AAA Cash Amount (the Cash Accumulation Period being
calculated separately for each Bullet Term Advance or each
Series 1 Term AAA Cash Amount);
(c) whether amounts are outstanding in respect of any Pass-Through
Term Advances or Scheduled Amortisation Term Advances that are
then due and payable; and
(d) whether the Scheduled Amortisation Period has started or would
start during the immediately succeeding Distribution Period in
respect of any Scheduled Amortisation Term Advance.
11.2 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS PRIOR TO THE
OCCURRENCE OF A TRIGGER EVENT
Prior to the occurrence of a Trigger Event, on each Distribution Date,
the Cash Manager (at the direction of the Mortgages Trustee acting on
behalf of the Beneficiaries at their direction and with their consent)
shall apply the Mortgages Trust Available Principal Receipts as
provided in this Clause 11:
(a) first, an amount shall be allocated and distributed to Funding
in respect of the Funding Share (as determined on the previous
Distribution Date) of up to the aggregate of (i) the amounts
required by Funding to replenish the First Reserve Fund to the
extent that amounts have been drawn from the First Reserve
Fund to make scheduled repayments of principal under any
Intercompany Loan and (ii) to the extent that there is a
shortfall in the Funding Liquidity Reserve Fund Required
Amount, an amount equal to the shortfall required to be paid
by Funding into the Funding Liquidity Reserve Fund;
(b) second, from and including the start of a Cash Accumulation
Period, any remaining Mortgages Trust Available Principal
Receipts shall be allocated and distributed to Funding in
respect of the remaining Funding Share (as determined on the
previous Distribution Date) after making the distributions in
(a) above until an amount of up to the relevant Bullet Amount
or the relevant Series 1 Term AAA Cash Amount has
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been or will have been accumulated by Funding, as shown on the
Cash Accumulation Ledger and on the relevant Cash Accumulation
Sub-Ledger, as applicable;
(c) third, the Cash Manager on behalf of the Mortgages Trustee
shall allocate and distribute any remaining Mortgages Trust
Available Principal Receipts to Funding in an amount in
respect of the remaining Funding Share (as determined on the
previous Distribution Date) after making the distributions in
(a) and (b) above, of up to the Scheduled Amortisation Amount
due on the relevant Scheduled Amortisation Term Advance on the
immediately succeeding Interest Payment Date;
(d) fourth, from and including the date when amounts are or will
become outstanding on the next following Interest Payment Date
in respect of one or more Pass-Through Term Advances that are
due and payable (the PAYABLE PASS-THROUGH TERM ADVANCES) under
an Intercompany Loan, ignoring for these purposes the deferral
of repayment of any Term BBB Advance, any Term A Advance and
any Term AA Advance, any remaining Mortgages Trust Available
Principal Receipts shall be allocated and distributed to
Funding in respect of the Funding Share (as determined on the
previous Distribution Date after making the distributions in
(a), (b) and (c) above), in an amount of up to the aggregate
amount of the following amounts in respect of each
Intercompany Loan under which such Payable Pass-Through Term
Advances arise until all of such Payable Pass-Through Term
Advances are fully repaid or will on the next following
Interest Payment Date be fully repaid. The amounts referred to
above shall be determined in respect of each Intercompany Loan
Agreement advanced by any Issuer to Funding which then
comprises a Payable Pass-Through Term Advance (INTERCOMPANY
LOAN AGREEMENT X) and shall be:
(i) prior to the occurrence of any option to redeem the
Notes or any New Notes issued by the Issuer (or a New
Issuer) which is the lender of such Intercompany Loan
Agreement X (but only where such right of redemption
arises on or after a particular specified date and not
as a result of the occurrence of any event specified
in the Terms and Conditions), the Outstanding
Principal Balance of each Payable Pass-Through Term
Advance forming part of such Intercompany Loan
Agreement X; and
(ii) after the occurrence of any option to redeem the Notes
or any New Notes issued by the Issuer or a New Issuer
which is the lender of such Intercompany Loan
Agreement X (but only where such right of redemption
arises on or after a particular specified date and not
as a result of the occurrence of any event specified
in the Terms and Conditions), an amount calculated as
follows:
Funding Share Percentage x Principal Receipts x
Outstanding Principal Balance of Intercompany Loan
Agreement X/Aggregate Outstanding Principal Balance of
all outstanding Intercompany Loans,
(but in each case taking into account any amounts
available to Funding in the Funding Principal Ledger
to make such payments); and
(e) (i) if such Distribution Date is a Seller Share Event
Distribution Date, then the Cash Manager shall deposit
such excess Mortgages Trust Available Principal
Receipts (the RETAINED PRINCIPAL RECEIPTS) in the
Mortgages Trustee GIC Account and make a corresponding
credit to the Principal Ledger; or
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(ii) if such Distribution Date is not a Seller Share
Distribution Date, any excess Mortgages Trust
Available Principal Receipts shall be paid to the
Seller in respect of the Seller Share (as determined
on the previous Distribution Date).
11.3 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE
OCCURRENCE OF AN ASSET TRIGGER EVENT
After the occurrence of an Asset Trigger Event, all Principal Receipts
and any Retained Principal Receipts will be distributed by the Cash
Manager as follows:
(a) if the immediately preceding Distribution Date was a Seller
Share Event Distribution Date, all of the Retained Principal
Receipts to Funding until the Funding Share is zero; and then
(b) pro rata and pari passu between Funding and the Seller
according to the Current Funding Share Percentage of the Trust
Property and the Current Seller Share Percentage of the Trust
Property respectively (and, for the avoidance of doubt, such
payments may reduce the Current Seller Share to an amount less
than the Minimum Seller Share), until the Funding Share is
zero.
When the Funding Share is zero, the remaining Principal Receipts (if
any) will be allocated to the Seller.
11.4 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE
OCCURRENCE OF A NON-ASSET TRIGGER EVENT
After the occurrence of a Non-Asset Trigger Event (where an Asset
Trigger Event has not occurred), all Principal Receipts and any
Retained Principal Receipts will be paid to Funding until the Funding
Share of the Trust Property is zero and will thereafter be paid to the
Seller.
11.5 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING ENTRY BY
FUNDING INTO A NEW TERM ADVANCE
If a New Issuer makes a New Term Advance to Funding pursuant to a New
Intercompany Loan Agreement, then the parties hereto shall amend the
terms of Clause 11 as required to reflect the repayment provisions of
that New Term Advance. If (with the consent of the Seller and Funding)
any New Issuer or New Issuers acquire a direct interest in the Trust
Property, the parties hereto shall amend the terms of this Deed as
required to reflect such acquisition by the New Issuer or New Issuers.
For the avoidance of doubt, in either case, the parties hereto shall
amend the terms of the Trigger Events if required to do so by the
Rating Agencies as a result of the issue of New Notes by any such New
Issuer or New Issuers, as the case may be.
12. ALLOCATION OF LOSSES
12.1 Subject as provided herein (and in particular, Clause 8), all Losses
sustained on the Loans during a Distribution Period shall be applied
in reducing pro rata both the Funding Share and the Seller Share on
each Relevant Distribution Date by multiplying the Losses in the
relevant Distribution Period by the Current Funding Share Percentage,
(as calculated on the immediately preceding Distribution Date), the
product of which shall be allocated to Funding (until the Funding
Share is zero), and the remainder of such Losses shall be allocated to
the Seller.
12.2 In the event that any sums are recovered from Borrowers in respect
of which any Losses has been recorded on the Losses Ledger (other than
in the event that such recovery occurs subsequent
16
to completion of Enforcement Procedures), they shall belong to Funding
and the Seller on a separate trust but in the same proportions as the
Seller Share Percentage and Funding Share Percentage applying as at
the Closing Date or in respect of any later Distribution Periods, in
the same proportion as the Seller Share Percentage and the Funding
Share Percentage applying on the date immediately following the date
on which any previous recoveries of Losses were paid to Funding and the
Seller. Such recoveries shall be paid to Funding and the Seller as
soon as reasonably practicable. If a recovery is made on a Loan after
Funding has discharged all its obligations to the Funding Secured
Creditors, then the sums recovered shall be held by the Mortgages
Trustee for the benefit of the Seller only. No income shall arise or
accrue on such recoveries.
13. LEDGERS
The Mortgages Trustee shall maintain, or shall procure that there are
maintained, the following Mortgages Trustee Ledgers:
(a) the Principal Ledger, which shall record all receipts of
Principal Receipts and Retained Principal Receipts and
distribution of the same to Funding and the Seller;
(b) the Revenue Ledger, which shall record all receipts of Revenue
Receipts and distribution of the same to Funding and the
Seller;
(c) the Losses Ledger, which shall record Losses in relation to
the Loans; and
(d) the Funding Share/Seller Share Ledger which shall record the
Current Funding Share, the Current Seller Share of the Trust
Property, the Current Funding Share Percentage and the Current
Seller Share Percentage.
14. COSTS AND EXPENSES OF THE MORTGAGES TRUSTEE
The Mortgages Trustee shall be entitled to charge and be remunerated
for the work undertaken by it as trustee of the trusts created by this
Deed. The remuneration shall be on such terms (if any) as the
Mortgages Trustee may from time to time agree with the Seller and
Funding in writing. In default of such agreement, Funding and the
Seller shall indemnify the Mortgages Trustee from time to time with
such regularity as is reasonably agreed between the parties, of the
documentable costs and expenses directly and properly incurred by the
Mortgages Trustee in performing its obligations hereunder together
with any amounts in respect of Irrecoverable VAT incurred in respect
of such costs and expenses. The cost of such indemnity shall be paid
in accordance with the priority of payments set out in Clause 10.2 of
this Deed.
15. DIRECTIONS FROM BENEFICIARIES
15.1 SERVICING AGREEMENT AND CASH MANAGEMENT AGREEMENT
On the Initial Closing Date the Mortgages Trustee shall enter into the
Servicing Agreement and the Cash Management Agreement.
15.2 DIRECTIONS FROM BENEFICIARIES
Subject to Clause 15.3 below and to any other agreement between the
Beneficiaries, the Beneficiaries direct the Mortgages Trustee to, and
the Mortgages Trustee covenants with the Seller and Funding that the
Mortgages Trustee shall, take all necessary steps and do everything
which both Funding and the Seller (acting together) may reasonably
request or direct it to do in order to give effect to the terms of
this Deed or the other Transaction Documents to which the Mortgages
Trustee is a party.
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15.3 Each of Funding and the Seller covenants with the other that it shall
not direct or request the Mortgages Trustee to do any act or thing
which breaches the terms of, or is otherwise expressly dealt with
(such that the Mortgages Trustee has no discretion) by, any of the
Transaction Documents.
15.4 NO REQUIREMENT TO ACT
The Mortgages Trustee will not be bound and shall have no power to
take any proceedings, actions or steps under or in connection with any
of this Deed or the other Transaction Documents to which it is a party
unless:
(a) it shall have been directed to do so by the Beneficiaries or
it is required to do so under any express provision of this
Deed or the other Transaction Documents (but subject to Clause
15.2 in respect of conflict of directions); and
(b) it shall have been indemnified to its satisfaction against all
liabilities, proceedings, claims and demands to which it may
be or become liable and all costs, charges and expenses which
may be incurred by it in connection therewith and the terms of
such indemnity may include the provision of a fighting fund,
non-recourse loan or other similar arrangement.
15.5 COVENANT OF THE MORTGAGES TRUSTEE
Subject to Clause 15.2, the Mortgages Trustee covenants with each of
the Seller and Funding to exercise all of its rights arising under the
Trust Property (including without limitation any rights of
enforcement) for the benefit of and on behalf of the Beneficiaries.
16. EARLY TERMINATION OF THE MORTGAGES TRUST
On giving not more than 61 nor less than 31 days' notice to Funding,
the Beneficiaries agree that the Seller may pay to Funding the
Termination Price in exchange for the Funding Share if the aggregate
Outstanding Principal Balance under all Intercompany Loan Agreements
is at any time less than 10 per cent. of the aggregate Outstanding
Principal Balance of all Intercompany Loan Agreements as at the
respective drawdown dates thereof. Thereafter, the Mortgages Trustee
shall hold the Trust Property for the Seller absolutely, freed and
released from the Mortgages Trust.
17. TRANSFERS
17.1 FUNDING SHALL NOT ASSIGN
Subject to the right of Funding (or the Security Trustee or a Receiver
on its behalf) to sell the Funding Share of the Trust Property
following the service of an Intercompany Loan Enforcement Notice
(which right is hereby conferred), Funding covenants with the Seller
that it shall not, and shall not purport to, sell, assign, transfer,
convey, charge, declare a trust over, create any beneficial interest
in, or otherwise dispose of the Funding Share in the Trust Property,
or any of Funding's rights, title and interest or benefit in any of
the Portfolio or the Trust Property to a third party, other than
pursuant to the terms of the Transaction Documents (including for the
avoidance of doubt, the Funding Deed of Charge).
17.2 SELLER SHALL NOT ASSIGN
The Seller covenants with Funding that it shall not, and shall not
purport to, sell, assign, transfer, convey, charge, declare a trust
over, create any beneficial interest in, or otherwise
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dispose of the Seller Share in the Trust Property or any of the
Seller's rights, title and interest or benefit in the Trust Property
to a third party, other than pursuant to the terms of the Transaction
Documents.
18. COVENANTS OF THE MORTGAGES TRUSTEE
Save with the prior written consent of the Beneficiaries or as
provided in or envisaged by this Deed and the other Transaction
Documents to which the Mortgages Trustee is a party, the Mortgages
Trustee shall not, so long as it is acting as Mortgages Trustee
hereunder:
(a) Negative Pledge
create or permit to subsist any mortgage, standard security,
pledge, lien, charge or other security interest whatsoever
(unless arising by operation of law), upon the whole or any
part of its assets (including any uncalled capital) or its
undertakings, present or future;
(b) Disposal of Assets
transfer, sell, lend, part with or otherwise dispose of, or
deal with, or grant any option or present or future right to
acquire any of its assets or undertakings or any interest,
estate, right, title or benefit therein or thereto or agree or
attempt or purport to do so;
(c) Equitable Interest
permit any person other than the Beneficiaries to have any
equitable or beneficial interest in any of its assets or
undertakings or any interest, estate, right, title or benefit
therein;
(d) Bank Accounts
have an interest in any bank account, other than as set out in
the Transaction Documents;
(e) Restrictions on Activities
carry on any business other than as described in this Deed and
the Mortgage Sale Agreement;
(f) Borrowings
incur any indebtedness in respect of borrowed money whatsoever
or give any guarantee or indemnity in respect of any such
indebtedness;
(g) Merger
consolidate or merge with any other person or convey or
transfer its properties or assets substantially as an entirety
to any other person;
(h) Employees or premises
have any employees or premises or subsidiaries (but shall
procure that, at all times, it shall retain at least one
independent director);
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(i) Further shares
issue any further shares; or
(j) United States activities
engage in any activities in the United States (directly or
through agents) or derive any income from United States
sources as determined under United States income tax
principles or hold any property if doing so would cause it to
be engaged or deemed to be engaged in a trade or business
within the United States as determined under United States tax
principles.
19. POWER TO DELEGATE
19.1 POWER TO DELEGATE
Subject to Clause 19.2, the Mortgages Trustee may (notwithstanding any
rule of law or equity to the contrary) delegate (revocably or
irrevocably and for a limited or unlimited period of time) the
performance of all or any of its obligations and the exercise of all
or any of its powers under this Deed or imposed or conferred on it by
law or otherwise to any person or body of persons fluctuating in
number selected by it and any such delegation may be by power of
attorney or in such other manner as the Mortgages Trustee may think
fit and may be made upon such terms and conditions (including the
power to sub-delegate) as the Mortgages Trustee may think fit.
19.2 NO FURTHER APPOINTMENTS
Notwithstanding the provisions of Clause 19.1, the Mortgages Trustee
shall not appoint any agent, attorney or other delegate having power
to act in respect of the Trust Property unless it is directed in
writing to do so by the Beneficiaries. The appointment of any agent,
attorney or other delegate hereunder above shall terminate immediately
upon the occurrence of a Trigger Event.
20. POWERS OF INVESTMENT
Save as expressly provided for in this Deed, the Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement, the
Mortgages Trustee shall have no further or other powers of investment
with respect to the Trust Property and neither the Trustee Xxx 0000
nor any other provision relating to trustee powers of investment
implied by statute or general law shall apply to the Mortgages Trust
and, for the avoidance of doubt, the statutory power to accumulate
income conferred on trustees by Section 31 of the Trustee Act 1925 is
expressly excluded.
21. OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE
21.1 NO ACTION TO IMPAIR TRUST PROPERTY
Except for actions expressly authorised by this Deed, the Mortgages
Trustee shall take no action reasonably likely to impair the interests
of the Beneficiaries in any Trust Property now existing or hereafter
created or to impair the value of any Loan or its Related Security
subject to the Mortgages Trust.
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21.2 LITIGATION
The Mortgages Trustee must not prosecute or defend any legal or other
proceedings anywhere in the world (at the cost of the Trust Property)
unless it obtains legal or other advice that it is in the interests of
the Beneficiaries to do so.
21.3 NO IMPLIED DUTIES
The duties and obligations of the Mortgages Trustee under the
Mortgages Trust shall be determined solely by the express provisions
of this Deed (but without prejudice to the duties and obligations of
the Mortgages Trustee under any of the other Transaction Documents).
The Mortgages Trustee shall not be liable under this Deed except for
the performance of such duties and obligations as shall be
specifically set forth in this Deed. No implied covenants or
obligations shall be read into this Deed against the Mortgages
Trustee, and the permissible right of the Mortgages Trustee to do
things set out in this Deed shall not be construed as a duty.
21.4 NO LIABILITY
Neither the Mortgages Trustee, Funding (in its capacity as a
Beneficiary hereunder) nor the Seller (in its capacity as a
Beneficiary hereunder) shall be liable to each other, in the absence
of wilful default, negligence or breach of the terms of this Deed, in
respect of any loss or damage which arises out of the exercise or
attempted or purported exercise or failure to exercise any of their
respective powers.
21.5 RELIANCE ON CERTIFICATES
The Mortgages Trustee may rely on and shall be protected in acting on,
or in refraining from acting in accordance with, any resolution,
officer's certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented to it pursuant
to the Transaction Documents by the proper party or parties.
21.6 RELIANCE ON THIRD PARTIES
The Mortgages Trustee may, in relation to these presents, act on the
opinion or advice of or a certificate or any information obtained from
any lawyer, banker, valuer, broker, accountant, financial adviser,
securities dealer, merchant bank, computer consultant or other expert
in the United Kingdom or elsewhere and shall not, provided that it
shall not have acted fraudulently or in breach of any of the
provisions of the Transaction Documents, be responsible for any loss
occasioned by so acting. Any such opinion, advice, certificate or
information may be sent or obtained by letter, telemessage, telex,
cable or facsimile device and the Mortgages Trustee shall not be
liable for acting on any opinion, advice, certificate or information
purporting to be so conveyed although the same shall contain some
error or shall not be authentic, provided that such error or lack of
authenticity shall not be manifest.
22. NO RETIREMENT OF MORTGAGES TRUSTEE
22.1 NO RETIREMENT
The Mortgages Trustee shall not, and shall not purport to, retire as
the trustee of the Mortgages Trust or appoint any additional trustee
of the Mortgages Trust and shall have no power to retire or appoint
any additional trustee under the Trustee Xxx 0000 or otherwise.
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22.2 NO REPLACEMENT
Neither the Seller nor Funding shall at any time remove or purport to
remove and/or replace the Mortgages Trustee as the trustee of the
Mortgages Trust.
22.3 NO TERMINATION
Prior to the payment by Funding of all amounts owing under the
Intercompany Loan Agreements and under the Transaction Documents,
neither the Seller nor Funding shall at any time, except in accordance
with the provisions of Clauses 16 and 23, terminate or purport to
terminate the Mortgages Trust and, in particular, but without
prejudice to the generality of the foregoing, the Seller and Funding
shall not in reliance on their absolute beneficial interests in the
Trust Property call for the transfer to them or vesting in them of the
legal estate in all or any part of the Trust Property.
23. TERMINATION
Subject to Clause 16, the Mortgages Trust shall terminate in respect
of the Trust Property (if any then remains) upon the earlier to occur
of (i) the date on which the Funding Share is zero, and (ii) any other
date agreed in writing by Funding and the Seller.
24. FURTHER ASSURANCES
The parties agree that they will co-operate fully to do all such
further acts and things and execute any further documents as may be
necessary or desirable to give full effect to the arrangements
contemplated by this Deed.
25. AMENDMENTS, ETC.
25.1 AMENDMENTS AND WAIVERS
Without prejudice to Clause 28 of the Funding Deed of Charge, no
amendment or waiver of any provision of this Deed nor consent to any
departure by any of the parties therefrom shall in any event be
effective unless the same shall be in writing and signed by each of
the parties 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.
25.2 ENTIRE AGREEMENT
This Deed contains a final and complete integration of all prior
expressions by the parties with respect to the subject matter of this
Deed and constitutes the entire agreement among the parties with
respect to the subject matter of this Deed superseding all prior oral
or written understandings other than the other Transaction Documents.
26. NON PETITION COVENANT
The Seller hereby agrees that it shall not institute against either
Funding or the Mortgages Trustee any winding-up, administration,
insolvency or similar proceedings so long as any sum is outstanding
under any Intercompany Loan Agreement and for one year plus one day
since the last day on which any such sum was outstanding.
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27. NO PARTNERSHIP OR AGENCY
Nothing in this Deed shall be taken to constitute or create a
partnership between any of the parties to this Deed or to make or
appoint the Seller the agent of Funding (or vice versa).
28. CALCULATIONS
In the absence of manifest error, any determination or calculation or
performance by or on behalf of the Mortgages Trustee in connection
with the provisions of this Deed shall be deemed to be conclusive.
29. NO WAIVER; REMEDIES
No failure on the part of any party to this Deed to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy. The remedies in this Deed are cumulative
and not exclusive of any remedies provided by law.
30. SEVERABILITY
Where any provision in or obligation under this Deed shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations under
this Deed, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
31. COUNTERPARTS
This Deed may be executed and delivered in any number of counterparts
(including by facsimile), all of which, taken together, shall
constitute one and the same deed and any Party may enter into the same
by executing and delivering a counterpart (including by facsimile),
provided however that this Deed shall have no force or effect until it
is executed by the last Party to execute the same. Subject to the
proviso to the preceding sentence, this Deed shall be fully effective
and binding on each Party upon at least one copy of this Deed having
been executed and delivered by such Party notwithstanding that any
other Party to this Deed has executed or executes or has delivered or
delivers a counterpart of this Deed.
32. CONFIDENTIALITY
32.1 GENERAL OBLIGATION OF CONFIDENTIALITY
Unless otherwise required by applicable law, and subject to Clause
32.2 below, each of the parties agrees to maintain the confidentiality
of this Deed in its communications with third parties and otherwise.
None of the parties shall disclose to any person any information
relating to the business, finances or other matters of a confidential
nature of or relating to any other party to this Deed or any of the
Transaction Documents which it may have obtained as a result of having
entered into this Deed or otherwise.
32.2 EXCEPTIONS
The provisions of Clause 32.1 above shall not apply:
(a) to the disclosure of any information to any person who is a
party to any of the Transaction Documents as expressly
permitted by the Transaction Documents;
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(b) to the disclosure of any information which is or becomes
public knowledge otherwise than as a result of the wrongful
conduct of the recipient;
(c) to the extent that the recipient is required to disclose the
same pursuant to any law or order of any court or pursuant to
any direction or requirement (whether or not having the force
of law) of any central bank or any governmental or other
regulatory or Taxation authority;
(d) to the disclosure of any information to professional advisers
who receive the same under a duty of confidentiality;
(e) to the disclosure of any information with the consent of the
parties hereto;
(f) to the disclosure to the Rating Agencies or any of them of
such information as may be requested by any of them for the
purposes of setting or reviewing the rating assigned to the
Notes (or any of them), provided that no information which
would disclose the identity of a Borrower shall be disclosed
to the Rating Agencies or any of them;
(g) to the disclosure of any information disclosed to a
prospective assignee of Funding (provided that it is disclosed
on the basis that the recipient will hold it confidential); or
(h) to any disclosure for the purposes of collecting in or
enforcing the Trust Property or any of it.
33. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Deed do not intend that any term of this Deed
should be enforced, by virtue of the Contracts (Rights of Third
Parties) Xxx 0000, by any person who is not a party to this Deed
(other than the Funding Security Trustee).
34. ADDRESSES FOR NOTICES
Any notices to be given pursuant to this Deed to any of the parties
hereto shall be sufficiently served if sent by prepaid first class
post, by hand or facsimile transmission and shall be deemed to be
given (in the case of facsimile transmission) when despatched, (where
delivered by hand) on the day of delivery if delivered before 17.00
hours on a London Business Day or on the next London Business Day if
delivered thereafter or (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 Abbey National PLC, at Abbey
National House, 0 Xxxxxx Xxxxxx, Xxxxxx'x Xxxxx, Xxxxxx XX0
0XX (facsimile number (00) 00 0000 0000) for the attention of
the Company Secretary with a copy to Abbey National PLC, c/o
Abbey House (AAM 129), 000 Xxxxxxx Xxxx Xxxx, Xxxxxx Xxxxxx
XX0 0XX (facsimile number (00) 0000 000 000) for the attention
of Securitisation Team, Retail Credit Risk;
(b) in the case of the Mortgages Trustee to Xxxxxx Trustees
Limited, x/x Xxxxx Xxxxxxxx XXX, Xxxxx National House, 0
Xxxxxx Xxxxxx, Xxxxxx'x Xxxxx, Xxxxxx XX0 0XX (facsimile
number (00) 00 0000 0000) for the attention of the Company
Secretary with a copy to Abbey National PLC, c/o Abbey House
(AAM 129), 000 Xxxxxxx Xxxx Xxxx, Xxxxxx Xxxxxx XX0 0XX
(facsimile number (00) 0000 000 000) for the attention of
Securitisation Team, Retail Credit Risk;
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(c) in the case of Funding, to Xxxxxx Funding Limited, x/x Xxxxx
Xxxxxxxx XXX, Xxxxx National House, 0 Xxxxxx Xxxxxx, Xxxxxx'x
Xxxxx, Xxxxxx XX0 0XX (facsimile number (00) 00 0000 0000) for
the attention of the Company Secretary with a copy to Abbey
National PLC, c/o Abbey House (AAM 129), 000 Xxxxxxx Xxxx
Xxxx, Xxxxxx Xxxxxx XX0 0XX (facsimile number (00) 0000 000
019) for the attention of Securitisation Team, Retail Credit
Risk;
(d) in each case with a copy to the Security Trustee, for the
attention of The Bank of New York, acting through its Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxx Square, Xxxxxx Xxxxx, Xxxxxx
X00 0XX (facsimile number (00) 00 0000 0000/6399) for the
attention of Corporate Trust Services,
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by
any party to the others by written notice in accordance with the
provisions of this Clause 34.
35. GOVERNING LAW AND SUBMISSION TO JURISDICTION
35.1 GOVERNING LAW
This Deed is governed by, and shall be construed in accordance with,
English law.
35.2 SUBMISSION TO JURISDICTION
Each party to this Deed hereby irrevocably submits to the
non-exclusive jurisdiction of the English courts in any action or
proceeding arising out of or relating to this Deed, and hereby
irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined by such courts. Each party to
this Deed hereby irrevocably waives, to the fullest extent it may
possibly do so, any defence or claim that the English courts are an
inconvenient forum for the maintenance or hearing of such action or
proceeding.
Exclusion of Trustee Xxx 0000
Xxx Xxxxxxx Xxx 0000 is hereby excluded to the maximum extent
permissible, to the intent that it shall not apply to the trusts
constituted hereunder and that the parties shall be in the same
position as they would be had that Act not come into force.
IN WITNESS of which this Deed has been duly executed and delivered by the
parties hereto as a deed which has been delivered on the date first appearing
on page one.
EXECUTED as a DEED by )
XXXXXX FUNDING )
LIMITED as Beneficiary )
acting by two )
directors/a director and the secretary )
Director
Director/Secretary
EXECUTED as a DEED by
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XXXXXX TRUSTEES )
LIMITED as Mortgages Trustee )
acting by two )
directors/a director and the secretary )
Director
Director/Secretary
EXECUTED as a DEED by
WILMINGTON TRUST SP )
SERVICES (LONDON) LIMITED as Settlor )
acting by )
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SIGNED as a DEED )
by: )
as attorney for and on behalf of )
ABBEY NATIONAL PLC as )
Seller, Cash Manager and Beneficiary )
under a power of attorney dated )
in the presence of: )
Signature of witness:
Name of witness:
Address of witness:
Occupation of witness:
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