DRAFT: 03.11.04 Exhibit 4.2
AMENDED AND RESTATED MORTGAGES TRUST DEED
DATED [{circle}], 2004
HALIFAX PLC
AND
PERMANENT FUNDING (NO.1) LIMITED
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
AND
SFM OFFSHORE LIMITED
XXXXX & XXXXX
XXXXX & XXXXX LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and Construction..............................................1
2. Creation of Mortgages Trust...............................................2
3. Conditions Precedent......................................................2
4. Acquisition by Funding 1 of an Increased Interest in the Trust
Property..................................................................3
5. Initial Funding 1 Share and Initial Seller Share..........................4
6. Acquisition by Seller of an Interest Relating to Capitalised Interest.....5
7. Payment by the Seller to Funding 1 of the Amount Outstanding under
an Intercompany Loan......................................................5
8. Adjustment of Funding 1 Share Percentage and Seller Share
Percentage on Calculation Dates...........................................6
9. Minimum Seller Share......................................................8
10. Allocation and Distribution of Revenue Receipts..........................10
11. Allocation and Distribution of Principal Receipts........................11
12. Allocation of Losses.....................................................12
13. Funding 2 becomes a Beneficiary of the Mortgages Trust...................13
14. Ledgers..................................................................13
15. Costs and Expenses of the Mortgages Trustee..............................13
16. Directions from Beneficiaries............................................14
17. Transfers................................................................14
18. Covenants of the Mortgages Trustee.......................................15
19. Power to Delegate........................................................16
20. Powers of Investment.....................................................17
21. Other Provisions regarding the Mortgages Trustee.........................17
22. No Retirement of Mortgages Trustee.......................................18
23. Termination..............................................................18
24. Further Assurances.......................................................18
25. Amendments...............................................................19
26. Non Petition Covenant....................................................19
27. No Partnership or Agency.................................................19
28. Calculations.............................................................19
29. No Waiver; Remedies......................................................19
30. Severability.............................................................19
31. Tax......................................................................20
32. Confidentiality..........................................................20
33. Exclusion of Third Party Rights..........................................21
34. Addresses for Notices....................................................21
35. Governing Law and Submission to Jurisdiction.............................21
36. Exclusion of Trustee Act 2000............................................22
Signatories...................................................................23
THIS AMENDED AND RESTATED MORTGAGES TRUST DEED is made on [{circle}], 2004
between:
(1) HALIFAX PLC (registered number 2367076), a public limited company
incorporated under the laws of England and Wales whose registered office is
at Trinity Road, Halifax, West Yorkshire HX1 2RG (in its capacities as
SELLER, BENEFICIARY and CASH MANAGER);
(2) PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a private
limited company incorporated under the laws of England and Wales whose
registered office is at Xxxxxxxxx House, Guildhall Yard, London EC2V 5AE
(in its capacity as a BENEFICIARY);
(3) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited company incorporated under the laws of Jersey whose registered
office is at 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX, Channel Islands (in
its capacity as MORTGAGES TRUSTEE); and
(4) SFM OFFSHORE LIMITED (registered number 76015), a private limited company
incorporated under the laws of Jersey whose registered office is at 00
Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX, Channel Islands (in its capacity as
SHARE TRUSTEE of the Mortgages Trustee).
WHEREAS:
(A) The Mortgages Trust was constituted by the Share Trustee of the Mortgages
Trustee in favour of Funding 1 and the Seller on the terms and subject to
the conditions set out in the Mortgages Trust Deed (as amended and/or
restated by this Deed and from time to time, the MORTGAGES TRUST DEED).
(B) The Mortgages Trustee holds the Trust Property as bare trustee for the
Beneficiaries upon, with and subject to the trusts, powers and provisions
of the Mortgages Trust Deed.
(C) The Seller carries on the business of, inter alia, originating residential
first mortgage loans to individual Borrowers in the United Kingdom and of
managing and administering such mortgage loans. The Seller assigned the
Initial Portfolio to the Mortgages Trustee on 14th June, 2002 and (from
time to time) has sold and may sell New Portfolios to the Mortgages
Trustee, pursuant to the terms of the Mortgage Sale Agreement. The Initial
Portfolio is, and any New Portfolios are and shall be, held by the
Mortgages Trustee (in relation to Scottish Loans, in its capacity as
trustee under a Scottish Declaration of Trust) on trust for the
Beneficiaries upon, with and subject to the trusts, powers and provisions
of the Mortgages Trust Deed.
(D) The parties to the Mortgages Trust Deed have agreed to amend and restate
the terms of the Mortgages Trust Deed as set out herein.
NOW THIS DEED WITNESSES:
1. DEFINITIONS AND CONSTRUCTION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Deed and dated [{circle}],
2004 (as the same may be amended, varied or supplemented from time to time
with the consent of the parties to this Deed) (the MASTER DEFINITIONS AND
CONSTRUCTION SCHEDULE) is expressly and specifically incorporated into this
Deed and, accordingly, the expressions defined in the Master Definitions
and Construction Schedule (as so amended, varied or supplemented from time
to time) shall, except where the
1
context otherwise requires and save where otherwise defined herein, have
the same meanings in this Deed, including the Recitals hereto and this Deed
shall be construed in accordance with the interpretation provisions set out
in CLAUSE 2 of the Master Definitions and Construction Schedule.
1.2 This Deed amends and restates the Mortgages Trust Deed made on 13th June,
2002 as amended and restated on 6th March, 2003, 25th November, 2003, 12th
March, 2004 and 22nd July, 2004 (the PRINCIPAL DEED). As of the date of
this Deed, any future rights or obligations (excluding such obligations
accrued to the date of this Deed) of a party under the Principal Deed shall
be extinguished and shall instead be governed by this Deed.
2. CREATION OF MORTGAGES TRUST
2.1 INITIAL TRUST PROPERTY
On 13th June, 2002 the Share Trustee of the Mortgages Trustee settled on
trust the Initial Trust Property to be held on trust absolutely as to both
capital and income by the Mortgages Trustee for the benefit, as tenants in
common, of the Seller as to the Initial Seller Share Percentage and Funding
1 as to the Initial Funding 1 Share Percentage.
2.2 INITIAL CLOSING TRUST PROPERTY
Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
assigned the Initial Closing Trust Property to the Mortgages Trustee on the
Initial Closing Date.
2.3 FUTURE TRUST PROPERTY
From time to time and pursuant to the Mortgage Sale Agreement, the Seller
has sold and intends to sell the Future Trust Property to the Mortgages
Trustee.
2.4 TRUST PROPERTY
Subject to CLAUSE 3, the Mortgages Trustee shall hold the Trust Property as
to both capital and income on trust absolutely for Funding 1 (as to the
Funding 1 Share) and for the Seller (as to the Seller Share) as tenants in
common upon, with and subject to all the trusts, powers and provisions of
this Deed.
3. CONDITIONS PRECEDENT
3.1 The Initial Trust Property is held by the Mortgages Trustee on the
Mortgages Trust.
3.2 The Initial Closing Trust Property shall be held by the Mortgages Trustee
on the Mortgages Trust upon the satisfaction of the following conditions
precedent:
(a) due execution and delivery of the Mortgage Sale Agreement as amended
and restated by all parties to it;
(b) due execution and delivery of this Deed by all parties to it; and
(c) in respect of the Funding 1 Share of the Trust Property only,
payment of the Purchase Price by Funding 1 to the Seller.
3.3 The Initial Closing Trust Property and any Future Trust Property shall be
held by the Mortgages Trustee on the Mortgages Trust subject to
satisfaction of the conditions set out in
2
CLAUSE 4.1 of the Mortgage Sale Agreement for the sale of New Loans and
their New Related Security to the Mortgages Trustee.
4. ACQUISITION BY FUNDING 1 OF AN INCREASED INTEREST IN THE TRUST PROPERTY
4.1 OFFER TO PAY
On not more than 60 days' written notice nor less than 20 days' written
notice, Funding 1 may offer to make a payment to the Seller so as to
increase Funding 1's share of the Trust Property and to cause a
corresponding decrease in the Seller's share of the Trust Property on the
date specified in that notice. Such offer may only be accepted if the
following conditions precedent are satisfied on such date:
(a) no deficiency is recorded on the Principal Deficiency Ledger as at the
most recent Funding 1 Interest Payment Date;
(b) no Note Event of Default or Intercompany Loan Event of Default shall
have occurred which is continuing or unwaived as at the relevant date;
(c) the Security Trustee is not aware that the increase in the
Funding 1 Share of the Trust Property (or the corresponding decrease
in the Seller Share of the Trust Property) would adversely affect the
then current credit ratings by the Rating Agencies (or any of them) of
the Notes;
(d) the Notes have been issued by the relevant Issuer, the subscription
proceeds received on behalf of the relevant Issuer and advanced by the
relevant Issuer to Funding 1 pursuant to an Intercompany Loan
Agreement, the proceeds of which will be applied by Funding 1 to make
the payment referred to in the notice on the relevant date;
(e) Funding 1 has entered into, if necessary, a New Start-up Loan
and a New Funding 1 Swap and adjustments have been made, if required,
to the General Reserve Fund;
(f) receipt of a solvency certificate executed by an authorised signatory
of the Seller in form and content acceptable to the Mortgages Trustee,
Funding 1 and the Security Trustee;
(g) as at the relevant date, the aggregate Outstanding Principal Balance
of Loans constituting the Trust Property, in respect of which the
aggregate amount in arrears is more than three times the monthly
payment then due, is less than 5 per cent. of the aggregate
Outstanding Principal Balance of all Loans constituting the Trust
Property;
(h) the Seller has not received written notice that the short term,
unsecured, unguaranteed and unsubordinated debt obligations of the
Seller are not rated at least [P-1] by Xxxxx'x, [A-1] by Standard and
Poor's and [F1] by Fitch at the time of, and immediately following,
the payment made by Funding 1 on the relevant date;
(i) the product of the WAFF and WALS for the Loans constituting the Trust
Property calculated on the relevant date in the same way as for the
Initial Portfolio (or as agreed by the Servicer and the Rating
Agencies from time to time) does not exceed the product of the WAFF
and WALS for the Loans constituting the Trust Property calculated on
the most recent previous Closing Date, plus [0.25] per cent.;
3
(j) the loan-to-value ratio of Loans in the Trust Property, after
application of the LTV Test on the relevant date, does not exceed the
loan-to-value ratio (based on the LTV Test) of Loans in the Trust
Property on the most recent previous Closing Date plus [0.25] per
cent.; and
(k) the General Reserve Fund has not been debited on or before the
relevant date for the purposes of curing a Principal Deficiency in
respect of the Term Advances in circumstances where the General
Reserve Fund has not been replenished by a corresponding amount by the
relevant date.
Funding 1 may not make or offer to make a payment to the Seller in
consideration of an increased share of the Trust Property if, as at the
relevant date, the Step-up Date in respect of any Note has been reached and
the Issuer who issued that Note has not exercised its option to redeem that
Note as at the relevant date in accordance with the Terms and Conditions of
that Note. For the avoidance of doubt, this prohibition on Funding 1 making
a payment to the Seller in consideration of an increased share of the Trust
Property shall remain in effect only so long as any such Note remains
outstanding and, upon, its redemption, Funding 1 may again make a payment
to the Seller in consideration of an increased share of the Trust Property.
4.2 COMPLETION OF ASSIGNMENT
If an offer is made by Funding 1 in accordance with CLAUSE 4.1 above and
that offer is accepted by the Seller, Funding 1 shall, subject to
satisfaction of the conditions precedent set out in CLAUSE 4.1 above, pay
to the Seller an amount equal to the increase in the Funding 1 share of the
Trust Property, the Funding 1 Share of the Trust Property shall increase by
a corresponding amount and the Seller Share of the Trust Property shall
decrease by the same amount.
4.3 AUDIT OF LOANS CONSTITUTING THE TRUST PROPERTY
If the short term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller fall below [A-1] by Standard & Poor's, [P-1] by
Xxxxx'x and/or [F1] by Fitch, then the Beneficiaries shall appoint a firm
of independent auditors (approved by the Rating Agencies) to determine
whether the Loans and their Related Security (or any part of them)
constituting the Trust Property complied with the representations and
warranties set out in Schedule 1 of the Mortgage Sale Agreement as at the
date such Loans were sold to the Mortgages Trustee. The costs of such
independent auditors shall be borne by the Beneficiaries pro rata according
to their respective current percentage shares in the Trust Property.
5. INITIAL FUNDING 1 SHARE AND INITIAL SELLER SHARE
5.1 INITIAL FUNDING 1 SHARE
The Initial Funding 1 Share of the Trust Property was [GBP]34.38 as at 13th
June, 2002 and [GBP]3,478,376,344.38 as at the Initial Closing Date. The
Initial Funding 1 Share Percentage was the Initial Funding 1 Share
expressed as a percentage of the Trust Property as at the Initial Closing
Date, such percentage being 34.38 per cent.
5.2 INITIAL SELLER SHARE
The Initial Seller Share of the Trust Property was the total amount of the
Trust Property minus the Initial Funding 1 Share as at 13th June, 2002. As
at the Initial Closing Date, the Initial Seller Share was
[GBP]6,638,679,574.44 and the Initial Seller Share Percentage was equal
4
to 100 per cent. minus the Initial Funding 1 Share Percentage, such
percentage being 65.62 per cent.
6. ACQUISITION BY SELLER OF AN INTEREST RELATING TO CAPITALISED INTEREST
6.1 Any increase in the Outstanding Principal Balance of a Loan due to
Capitalised Interest will be allocated to the Funding 1 Share of the Trust
Property and to the Seller Share of the Trust Property, based on
respectively the Funding 1 Share Percentage and the Seller Share Percentage
in the Trust Property as calculated on the most recent Calculation Date.
6.2 Prior to an Insolvency Event occurring in respect of the Seller, on each
Distribution Date the Seller shall make a cash payment to Funding 1 in an
amount equal to Funding 1's share of the Capitalised Interest in respect of
those Loans that are subject to Payment Holidays. As a result of making
such payment the Seller Share of the Trust Property will increase by an
amount equal to the amount paid to Funding 1 for Funding 1's Share of the
Capitalised Interest and Funding 1's Share of the Trust Property will
decrease by a corresponding amount. The cash payment shall be made in
accordance with CLAUSE 6.4 below.
6.3 If an Insolvency Event occurs in respect of the Seller, then the Seller may
acquire from Funding 1 its share of the Capitalised Interest in the same
manner as is contemplated in CLAUSE 6.2, but it is not obliged to do so.
6.4 In respect of the cash payment to be made by the Seller pursuant to CLAUSE
6.2, the Seller hereby directs the Mortgages Trustee to deduct from the
Seller's Share of the Mortgages Trust Available Revenue Receipts (allocated
to the Seller pursuant to CLAUSE 10.2 of this Deed) an amount equal to such
cash payment and to pay the same to Funding 1 in satisfaction of the
Seller's obligations under CLAUSE 6.2. To the extent that the Seller's
Share of the Mortgages Trust Available Revenue Receipts is less than the
amount required to be paid by it pursuant to CLAUSE 6.2, then the Seller
shall pay an amount equal to the shortfall directly to Funding 1 from its
own resources.
7. PAYMENT BY THE SELLER TO FUNDING 1 OF THE AMOUNT OUTSTANDING UNDER AN
INTERCOMPANY LOAN
7.1 CONDITIONS PRECEDENT TO ACCEPTANCE OF OFFER
On each occasion that the Seller offers to make a payment to Funding 1 of
the amount outstanding under an Intercompany Loan (referred to in this
CLAUSE 7 as the RELEVANT INTERCOMPANY LOAN), then Funding 1 may accept that
offer but only if:
(a) the Security Trustee has received written confirmation from each of
the Rating Agencies that the then current ratings of the Notes would
not be adversely affected by Funding 1 accepting the offer;
(b) Funding 1 would receive the payment from the Seller on a Funding 1
Interest Payment Date; and
(c) Funding 1 will apply the proceeds of the payment to repay the relevant
Intercompany Loan and the relevant Issuer has confirmed to Funding 1
that on that Funding 1 Interest Payment Date it will use the proceeds
of the relevant payment to repay the corresponding classes of Notes.
5
7.2 ADJUSTMENT TO SHARES IF OFFER ACCEPTED
If Funding 1 accepts the offer as described in CLAUSE 7.1 above, then the
Funding 1 Share of the Trust Property shall decrease by an amount
corresponding to the amount paid by the Seller and the Seller Share of the
Trust Property shall increase by the same amount.
8. ADJUSTMENT OF FUNDING 1 SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE ON
CALCULATION DATES
8.1 DISTRIBUTION
On each Calculation Date, excluding, for the avoidance of doubt, the
Initial Closing Date, the Funding 1 Share Percentage and the Seller Share
Percentage will be recalculated by the Cash Manager (on behalf of the
Mortgages Trustee and the Beneficiaries) based on the aggregate Outstanding
Principal Balance of the Loans constituting the Trust Property (as adjusted
from time to time) as at the close of business on the London Business Day
immediately preceding that Calculation Date. On each Distribution Date, the
Mortgages Trustee will distribute Principal Receipts and Revenue Receipts
in accordance with CLAUSEs 10 and 11 hereof.
8.2 CURRENT FUNDING 1 SHARE PERCENTAGE
On each Calculation Date (the RELEVANT CALCULATION DATE) or on the date
that the Mortgages Trust terminates, the Current Funding 1 Share Percentage
will be recalculated and the recalculated amount will take effect from the
next Distribution Date. The "Current Funding 1 Share Percentage" will be an
amount, expressed as a percentage (calculated to an accuracy of five
decimal places (rounded upwards), equal to:
A - B - C + D + E + F
--------------------- X 100
G
where,
A = the Current Funding 1 Share as calculated on the immediately
preceding Calculation Date (or, in the case of the first Calculation
Date, the Initial Funding 1 Share as at the Initial Closing Date);
B = the amount of any Principal Receipts to be distributed to Funding 1
on the Distribution Date immediately following the relevant
Calculation Date in accordance with the provisions described in CLAUSE
11 below;
C = the amount of any Losses sustained on the Loans in the period
from the last Calculation Date to the relevant Calculation Date and
the amount of any reductions occurring in respect of the Loans as
described in paragraphs (i) to (iv) of CLAUSE 8.4(a), in each case
allocated to Funding 1 in the Calculation Period ending on the
relevant Calculation Date;
D = an amount equal to any consideration to be paid by Funding 1 to the
Seller in relation to any New Loans to be sold to the Mortgages
Trustee on the relevant Calculation Date;
E = an amount equal to any consideration to be paid by Funding 1 to the
Seller in relation to any acquisition by Funding 1 from the Seller on
the relevant Calculation Date of an interest in the Trust Property;
6
F = an amount equal to any Capitalised Interest accruing on a Loan due
to Borrowers taking payment holidays or which has been allocated to
Funding 1 since the immediately preceding Calculation Date, less the
amount to be paid by the Seller on the relevant Distribution Date to
acquire an interest in the Trust Property in accordance with CLAUSE 6
above; and
G = the aggregate Outstanding Principal Balance of all the Loans
constituting the Trust Property as at the relevant Calculation Date
including after making the distributions, allocations and additions
referred to in (B), (C), (D), (E) and (F) above, and after taking
account of any distributions of Principal Receipts to Funding 1 and
the Seller, the amount of any Losses allocated to Funding 1 and the
Seller, the amount of any increase in the balances of the loans
constituting the Trust Property due to capitalisation of insurance
premiums due by Borrowers or Borrowers taking Payment Holidays under
Loans, the adjustments referred to in paragraphs (i) to (iv)
(inclusive) of CLAUSE 8.4(a) below and the amount of any other
additions or subtractions to the Trust Property.
8.3 CURRENT FUNDING 1 SHARE
The "Current Funding 1 Share" will be an amount equal to:
A - B - C + D + E + F
where "A", "B", "C", "D", "E" and "F" have the meanings specified in CLAUSE
8.2 above.
8.4 ADJUSTMENTS TO TRUST PROPERTY
(a) On each relevant Calculation Date, the aggregate Outstanding Principal
Balance of the Loans constituting the Trust Property shall be reduced or,
as the case may be, deemed to be reduced for the purposes of the
calculation set out in "G" above, if any of the following events has
occurred during the Calculation Period immediately preceding the relevant
Calculation Date:
(i) any Borrower exercises a right of set-off in relation to Loans
constituting part of the Trust Property so that the amount of
principal and/or interest owing under a loan is reduced but no
corresponding amount is received by the Mortgages Trustee in which
event the total amount of Trust Property shall be reduced by an
amount equal to the amount set-off; and/or
(ii) a Loan or its Related Security (i) is in breach of the Loan
Warranties in the Mortgage Sale Agreement, (ii) is the subject of a
Further Advance or (iii) is the subject of a Product Switch in the
circumstances set out in CLAUSE 8.4 of the Mortgage Sale Agreement or
other obligation of the Seller to repurchase, and if the Seller fails
to repurchase the Loan or Loans under the relevant Mortgage Account
and their Related Security as required by the terms of the Mortgage
Sale Agreement, then the Trust Property shall be deemed to be reduced
for the purposes of the calculation of "G" in CLAUSE 8.2 above by an
amount equal to the Outstanding Principal Balance of the relevant
Loan or Loans under the relevant Mortgage Account together with
Arrears of Interest and Accrued Interest; and/or
(iii) the Seller would be required to repurchase a Loan and its Related
Security in accordance with the terms of the Mortgage Sale Agreement,
but such Loan and its Related Security are not capable of repurchase,
in which case the Trust Property shall be deemed to be reduced for
the purposes of the calculation of "G" in CLAUSE 8.2 above by an
amount equal to the Outstanding Principal Balance of the relevant
Loan
7
or Loans under the relevant Mortgage Account together with Arrears of
Interest and Accrued Interest; and/or
(iv) the Seller materially breaches any other material warranty under the
Mortgage Sale Agreement and/or (for so long as it is the Servicer)
the Servicing Agreement, in which event the aggregate Outstanding
Principal Balance of Loans constituting the Trust Property shall be
deemed for the purposes of the calculation of "G" in CLAUSE 8.2 above
to be reduced by an amount equivalent to all losses, costs,
liabilities, claims, expenses and damages incurred by the
Beneficiaries as a result of such breach.
(b) The reductions and deemed reductions set out in paragraph (i) to (iv)
(inclusive) of CLAUSE 8.4(a) above shall be made on the relevant
Calculation Date first to the Seller's Share (including the Minimum Seller
Share) of the Trust Property only, and thereafter shall be made to the
Funding 1 Share of the Trust Property.
(c) If at any time after the Initial Closing Date the Mortgages Trustee holds,
or there is held to its order, or it receives, or there is received to its
order any property, interest, right or benefit relating to any Loan and its
Related Security which is or has been subject to any reduction or deemed
reduction pursuant to paragraphs (i) to (iv) (inclusive) of CLAUSE 8.4(a)
above, then such property, interest, right or benefit shall constitute a
Revenue Receipt under the relevant Loan. Such Revenue Receipt shall belong
to Funding 1 (but only if and to the extent that the related reductions
were applied against the Funding 1 Share of the Trust Property) and
thereafter shall belong to the Seller.
8.5 CURRENT SELLER SHARE PERCENTAGE
On each Calculation Date, the "Current Seller Share Percentage" will be an
amount calculated to the accuracy of five decimal places equal to:
100% - Current Funding 1 Share Percentage.
8.6 CURRENT SELLER SHARE
The "Current Seller Share" will be an amount equal to:
Outstanding Principal Balance of all the Loans in the Trust Property on
the relevant
Calculation Date - Current Funding 1 Share.
8.7 FUNDING 1 SHARE/SELLER SHARE
Neither the Funding 1 Share nor the Seller Share may be reduced below zero.
At all times the Funding 1 Share Percentage and the Seller Share Percentage
shall be equal to 100 per cent. of the Trust Property.
9. MINIMUM SELLER SHARE
9.1 INITIAL MINIMUM SELLER SHARE
The Seller Share of the Trust Property includes an amount equal to the
Minimum Seller Share. Unless and until the Funding 1 Share of the Trust
Property is in an amount equal to zero or an Asset Trigger Event occurs,
the Seller will not be entitled to receive Principal Receipts which would
reduce the Seller Share of the Trust Property to an amount less than the
Minimum Seller Share and the Seller consents and directs the Mortgages
Trustee accordingly.
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9.2 FLUCTUATION OF MINIMUM SELLER SHARE ON EACH CALCULATION DATE
At the Initial Closing Date, the Minimum Seller Share was
[GBP]505,862,790.74. The amount of the Minimum Seller Share will be
recalculated on each Calculation Date in accordance with the following
formula:
X + Y + Z
where:
X = [5]% of the aggregate Outstanding Principal Balance of all Loans
comprised in the Trust Property;
Y = the product of: (p x q) x r where:
p = [8]%;
q = the FLEXIBLE DRAW CAPACITY, being an amount equal to the excess of
(i) the maximum amount that Borrowers are entitled to draw under
Flexible Loans included in the Trust Property (whether or not drawn)
over (ii) the aggregate principal balance of actual Flexible Loan
advances made to Borrowers in the Trust Property on the relevant
Calculation Date (but excluding the Initial Advances made thereunder);
and
r = [3]; and
Z = the aggregate sum of reductions deemed made (if any) in accordance
with paragraphs (ii), (iii) and (iv) of CLAUSE 8.4(a).
9.3 RECALCULATION OF MINIMUM SELLER SHARE FOLLOWING OCCURRENCE OF EXCEPTIONAL
EVENTS
Prior to the occurrence of a Trigger Event:
(a) the calculation of the Minimum Seller Share in accordance with CLAUSE
9.2 above will be recalculated or increased (in consultation with the
relevant Rating Agencies) if the Seller merges or otherwise combines
its business with another bank or other financial institution so as to
increase the risks associated with Borrowers holding deposits in
Halifax accounts and such merger or combination would adversely affect
the then current ratings of the Notes and such adverse effect on the
then current ratings of the Notes would be avoided if the Minimum
Seller Share was so recalculated or increased;
(b) the calculation of the Minimum Seller Share in accordance with CLAUSE
9.2 above will be recalculated or increased (in consultation with the
relevant Rating Agencies) if notice has been received from one or more
of the Rating Agencies that the then current ratings of the Notes
would be downgraded and that such downgrade would be avoided if the
Minimum Seller Share was so recalculated or increased;
(c) the amount of the Minimum Seller Share as calculated in accordance
with CLAUSE 9.2 above will be decreased (and the calculation thereof
amended accordingly) from time to time at the request of the Seller or
Funding 1 (acting reasonably) provided that the Security Trustee has
received written confirmation from each of the Rating Agencies that
there would be no adverse effect on the then current ratings of the
Notes as a result thereof.
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10. ALLOCATION AND DISTRIBUTION OF REVENUE RECEIPTS
10.1 ALLOCATION AND DISTRIBUTION OF THIRD PARTY AMOUNTS
Pursuant to the Cash Management Agreement, the Cash Manager (at the
direction of the Mortgages Trustee on behalf of the Beneficiaries at their
direction and with their consent) will deduct, as and when identified,
Third Party Amounts from the Revenue Receipts standing to the credit of the
Mortgages Trustee GIC Account, and pay over the same to the proper
recipients thereof. The Mortgages Trustee and the Beneficiaries hereby
consent to such deductions.
10.2 ALLOCATION AND DISTRIBUTION OF MORTGAGES TRUST AVAILABLE REVENUE RECEIPTS
On each Distribution Date the Cash Manager (at the direction of the
Mortgages Trustee and on behalf of the Beneficiaries at their direction and
with their consent) will allocate and distribute Mortgages Trust Available
Revenue Receipts as follows:
(a) firstly, in or towards satisfaction pari passu and pro rata according
to the respective amounts thereof of:
(i) any costs, charges, liabilities and expenses then due or to
become due to the Mortgages Trustee under the provisions of this
Deed or any terms agreed by the Mortgages Trustee with the Seller
and Funding 1 in writing together with VAT thereon as provided
herein (if payable); and
(ii) any amounts due and payable by the Mortgages Trustee to third
parties in respect of the Mortgages Trust and incurred without
breach by the Mortgages Trustee of the documents to which it is a
party and for which payment has not been provided for elsewhere),
(including amounts due to H.M Customs and Excise and/or to the
Inland Revenue or any other taxation authority which has
jurisdiction over the Trust Property or the Mortgages Trustee in
respect of any stamp, issue, registration, documentary and other
fees, duties and taxes (including interest and penalties) payable
by the Mortgages Trustee in connection with (i) the execution and
delivery of this Deed; (ii) any action to be taken by or on
behalf of the Mortgages Trustee to enforce or to resolve any
doubt concerning or, for any other purpose in relation to, the
Mortgages Trust Deed; and (iii) any such tax which is primarily
due from either or both of the Seller and Funding 1 in their
capacities as Beneficiaries (and, for the avoidance of doubt,
only in such capacities) in circumstances where the Mortgages
Trustee has made a payment of such tax (or part thereof) by
reason of a failure by the Seller or Funding 1 to discharge their
primary liability in respect of such tax);
(b) secondly, in or towards satisfaction of any remuneration then due and
payable or to become due and payable during the following Calculation
Period to the Servicer and any costs, charges, liabilities and
expenses then due or to become due to the Servicer under the
provisions of the Servicing Agreement, together with VAT thereon as
provided therein (if payable);
(c) thirdly, to allocate and pay to Funding 1 an amount equal to the
lesser of:
(x) an amount determined by multiplying the total amount of the
remaining Mortgages Trust Available Revenue Receipts by the
Funding 1 Share
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Percentage of the Trust Property (as determined on the Relevant
Share Calculation Date); and
(y) the aggregate of Funding 1's obligations on the immediately
succeeding Funding 1 Interest Payment Date as set out under the
Funding 1 Pre-Enforcement Revenue Priority of Payments or, as the
case may be, the Funding 1 Post-Enforcement Priority of Payments
(but excluding any principal amount due under any Intercompany
Loan and/or items (j) and (k) of the Funding 1 Post-Enforcement
Priority of Payments), less (in each case only to the extent that
such amounts of interest or income would not otherwise be payable
under the Intercompany Loan or, as applicable, the Notes, on the
succeeding Interest Payment Date) the sum of (i) the interest or
other income credited or to be credited to Funding 1's Bank
Accounts on the immediately succeeding Funding 1 Interest Payment
Date and (ii) all other income (not derived from the distribution
of Revenue Receipts under the Mortgages Trust) which will
constitute Funding 1 Available Revenue Receipts on the succeeding
Funding 1 Interest Payment Date;
(d) fourthly, to allocate and distribute to the Mortgages Trustee and/or
Funding 1 (as applicable), an amount equal to any Loss Amount suffered
or incurred by it or them (as applicable); and
(e) fifthly, to allocate and distribute to the Seller an amount equal to
(if positive) the Mortgages Trust Available Revenue Receipts less the
amount of such Mortgages Trust Available Revenue Receipts applied
and/or allocated under paragraphs (a) to (d) above.
11. ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS
11.1 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS
(a) On each Calculation Date (the RELEVANT CALCULATION DATE), prior to
distributing any Principal Receipts, the Cash Manager shall ascertain:
(i) the amount of Mortgages Trust Available Principal Receipts;
(ii) whether the Distribution Date immediately succeeding the relevant
Calculation Date is within a Cash Accumulation Period relating to a
Bullet Term Advance or a Scheduled Amortisation Instalment (the Cash
Accumulation Period being calculated separately for each Bullet Term
Advance and Scheduled Amortisation Instalment); and
(iii) Funding 1's Cash Accumulation Requirement and Repayment Requirement.
(b) On each Distribution Date, the Cash Manager (at the direction of the
Mortgages Trustee acting on behalf of the Beneficiaries at their direction
and with their consent) shall then allocate and distribute Principal
Receipts as provided in this CLAUSE 11.
11.2 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS PRIOR TO THE OCCURRENCE
OF A TRIGGER EVENT
On each Distribution Date where no Trigger Event has occurred on or before
the immediately preceding Calculation Date, the Cash Manager shall allocate
and distribute Mortgages Trust Available Principal Receipts as follows:
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(a) firstly, where Funding 1 has no Cash Accumulation Requirement and no
Repayment Requirement on that Distribution Date, to allocate the
Mortgages Trust Available Principal Receipts to the Seller until the
Seller Share of the Trust Property (as calculated on the Relevant
Share Calculation Date) is equal to the Minimum Seller Share;
(b) secondly, if Funding 1 has a Cash Accumulation Requirement on that
Distribution Date, to allocate the Mortgages Trust Available Principal
Receipts to Funding 1 in an amount up to but not exceeding Funding 1's
Cash Accumulation Requirement on that Distribution Date;
(c) thirdly, if Funding 1 has a Repayment Requirement on that Distribution
Date, to allocate the Mortgages Trust Available Principal Receipts to
Funding 1 in an amount up to but not exceeding Funding 1's Repayment
Requirement on that Distribution Date; and
(d) fourthly, to allocate the remainder of the Mortgages Trust Available
Principal Receipts, if any, to the Seller until the Seller Share of
the Trust Property (as calculated on the Relevant Share Calculation
Date) is equal to the Minimum Seller Share.
11.3 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS ON OR AFTER THE
OCCURRENCE OF A NON-ASSET TRIGGER EVENT BUT PRIOR TO THE OCCURRENCE OF AN
ASSET TRIGGER EVENT
On each Distribution Date where a Non-Asset Trigger Event has occurred on
or before the immediately preceding Calculation Date and an Asset Trigger
Event has not occurred on or before that Calculation Date, all Mortgages
Trust Available Principal Receipts shall be allocated and distributed to
Funding 1 until the Funding 1 Share of the Trust Property (as calculated on
the relevant Share Calculation Date) is zero and shall thereafter be
allocated and paid to the Seller.
11.4 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS ON OR AFTER THE
OCCURRENCE OF AN ASSET TRIGGER EVENT
On each Distribution Date where an Asset Trigger Event has occurred on or
before the immediately preceding Calculation Date, all Mortgages Trust
Available Principal Receipts shall be allocated and distributed pari passu
and pro rata between Funding 1 and the Seller according to the Current
Funding 1 Share Percentage of the Trust Property (as calculated on the
Relevant Share Calculation Date) and the Current Seller Share Percentage of
the Trust Property (as calculated on the Relevant Share Calculation Date)
respectively until, in the case of Funding 1, the Funding 1 Share of the
Trust Property is zero (and, for the avoidance of doubt, such payments may
reduce the Current Seller Share to an amount less than the Minimum Seller
Share). When the Funding 1 Share of the Trust Property is zero, the
remaining Mortgages Trust Available Principal Receipts (if any) shall be
allocated to the Seller.
12. ALLOCATION OF LOSSES
Subject as provided in this Deed (and in particular, CLAUSE 8), all Losses
sustained on the Loans during a Calculation Period shall be applied in
reducing pro rata both the Funding 1 Share and the Seller Share of the
Trust Property. Funding 1's share and the Seller's share of the Losses
shall be determined by multiplying the Losses in the relevant Calculation
Period by the Current Funding 1 Share Percentage, (as calculated on the
Relevant Share Calculation Date), the product of which shall be allocated
to Funding 1, and the remainder of such Losses
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shall be allocated to the Seller, on each Calculation Date, in each case
prior to calculating the allocation of Mortgages Trustee Available
Principal Receipts on that Calculation Date.
13. FUNDING 2 BECOMES A BENEFICIARY OF THE MORTGAGES TRUST
On not more than 60 days' written notice nor less than 20 days' written
notice to the Mortgages Trustee, Funding 1 and the Seller may direct the
Mortgages Trustee to add Funding 2 as a beneficiary to the Mortgages Trust.
The Mortgages Trustee shall include Funding 2 as a beneficiary of the
Mortgages Trust if Funding 1 (or the Security Trustee) notifies the
Mortgages Trustee in writing that the following conditions precedent are
satisfied on the date of such inclusion:
(a) that the Security Trustee has received written confirmation from each
of the Rating Agencies that the inclusion of Funding 2 as a
beneficiary of the Mortgages Trust would not have an adverse effect on
the then current ratings of the Notes;
(b) no deficiency is recorded on the Principal Deficiency Ledger as at the
most recent Funding 1 Interest Payment Date;
(c) no Note Event of Default or Intercompany Loan Event of Default shall
have occurred which is continuing or unwaived as at the relevant
Distribution Date;
(d) requisite amendments have been made to the Transaction Documents to
enable the inclusion of Funding 2 as a beneficiary to the Mortgages
Trust (including, without limitation, changes to the way in which the
Mortgages Trustee will allocate Mortgages Trust Revenue Receipts and
Mortgages Trust Principal Receipts under this Deed); and
(e) the General Reserve Fund has not been debited on or before the
relevant Distribution Date for the purposes of curing a Principal
Deficiency in respect of the Term Advances in circumstances where the
General Reserve Fund has not been replenished by a corresponding
amount by the date.
14. LEDGERS
The Mortgages Trustee shall maintain, or shall procure that there are
maintained, the following Mortgages Trustee Ledgers:
(a) the Principal Ledger, which shall record all receipts of Principal
Receipts and distribution of the same to Funding 1 and the Seller;
(b) the Revenue Ledger, which shall record all receipts of Revenue
Receipts and distribution of the same to Funding 1 and the Seller;
(c) the Losses Ledger, which shall record Losses in relation to the Loans;
and
(d) the Funding 1 Share/Seller Share Ledger which shall record the Current
Funding 1 Share, the Current Seller Share of the Trust Property, the
Current Funding 1 Share Percentage and the Current Seller Share
Percentage.
15. COSTS AND EXPENSES OF THE MORTGAGES TRUSTEE
The Mortgages Trustee shall be entitled to charge and be remunerated for
the work undertaken by it as trustee of the trusts created by this Deed.
The remuneration shall be on
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such terms (if any) as the Mortgages Trustee may from time to time agree
with the Seller and Funding 1 in writing. Funding 1 and the Seller shall
indemnify the Mortgages Trustee from time to time with such regularity as
is reasonably agreed between the parties, for the documentable costs and
expenses directly and properly incurred by the Mortgages Trustee in
performing its obligations hereunder together with any amounts in respect
of Irrecoverable VAT incurred in respect of such costs and expenses. The
cost of such indemnity shall be paid in accordance with the priority of
payments set out in CLAUSE 10.2 of this Deed.
16. DIRECTIONS FROM BENEFICIARIES
16.1 On the Initial Closing Date, the Mortgages Trustee entered into the
Servicing Agreement, the Cash Management Agreement, the Mortgage Sale
Agreement, the Mortgages Trustee Guaranteed Investment Contract and the
Bank Account Agreement.
16.2 Subject to CLAUSE 16.4 below, the Mortgages Trustee covenants with the
Seller and Funding 1 that the Mortgages Trustee shall take all necessary
steps and do everything which both Funding 1 and the Seller (acting
together) may reasonably request or direct it to do in order to give effect
to the terms of this Deed or the other Transaction Documents to which the
Mortgages Trustee is a party.
16.3 Funding 1 and the Seller covenant with each other that neither shall direct
or request the Mortgages Trustee to do any act or thing which breaches the
terms of, or is otherwise expressly dealt with (such that the Mortgages
Trustee has no discretion) by, any of the Transaction Documents.
16.4 The Mortgages Trustee will not be bound and shall have no power to take any
proceedings, actions or steps under or in connection with any of this Deed
or the other Transaction Documents to which it is a party unless:
(a) it shall have been directed to do so by the Beneficiaries or it is
required to do so under any express provision of this Deed or the
other Transaction Documents (but subject to CLAUSE 16.2 in respect of
conflict of directions); and
(b) it shall have been indemnified to its satisfaction against all
liabilities, proceedings, claims and demands to which it may be or
become liable and all costs, charges and expenses which may be
incurred by it in connection therewith and the terms of such indemnity
may include the provision of a fighting fund, non-recourse loan or
other similar arrangement.
16.5 COVENANT OF THE MORTGAGES TRUSTEE
Subject to CLAUSE 16.2, the Mortgages Trustee covenants with each of the
Seller and Funding 1 to exercise all of its rights arising under the Trust
Property (including without limitation any rights of enforcement) for the
benefit of and on behalf of the Beneficiaries.
17. TRANSFERS
17.1 FUNDING 1 SHALL NOT ASSIGN
Subject to the terms of the Transaction Documents (including for the
avoidance of doubt, the Funding 1 Deed of Charge and the Second
Supplemental Funding 1 Deed of Charge) and the right of Funding 1 (or the
Security Trustee or a Receiver on its behalf) to sell the Funding 1 Share
of the Trust Property following the service of an Intercompany Loan
Enforcement Notice (which right is hereby conferred), Funding 1 covenants
with the Seller that it shall not,
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and shall not purport to, sell, assign, transfer, convey, charge, declare a
trust over, create any beneficial interest in, or otherwise dispose of the
Funding 1 Share in the Trust Property and/or its rights under this Deed, or
any of Funding 1's rights, title and interest or benefit in the Trust
Property and/or this Deed to or in favour of a third party.
17.2 SELLER SHALL NOT ASSIGN
Subject to the terms of the Transaction Documents, the Seller covenants
with Funding 1 that it shall not, and shall not purport to, sell, assign,
transfer, convey, charge, declare a trust over, create any beneficial
interest in, or otherwise dispose of the Seller Share in the Trust Property
and/or its rights under this Deed or any of the Seller's rights, title and
interest or benefit in the Trust Property and/or this Deed to or in favour
of a third party, without the prior consent of Funding 1 (such consent not
to be unreasonably withheld).
17.3 TRANSFERS TO FUNDING 2
Subject to CLAUSE 13, the parties hereby acknowledge that Funding 2 may
become a beneficiary to the Mortgages Trust after the Initial Closing Date
and if it is to become such a beneficiary then the Seller and/or Funding 1
shall be entitled to sell, assign, transfer, convey, charge, declare a
trust over, create a beneficial interest in, or otherwise dispose of their
respective shares in the Trust Property to Funding 2 or, as the case may
be, Funding 1 or the Seller.
18. COVENANTS OF THE MORTGAGES TRUSTEE
Save with the prior written consent of the Beneficiaries or as provided in
or envisaged by this Deed and the other Transaction Documents to which the
Mortgages Trustee is a party, the Mortgages Trustee shall not, so long as
it is acting as Mortgages Trustee hereunder:
(a) NEGATIVE PLEDGE
create or permit to subsist any mortgage, standard security, pledge,
lien, charge, assignation in security or other security interest
whatsoever (unless arising by operation of law), upon the whole or any
part of its assets (including any uncalled capital) or its
undertakings, present or future;
(b) DISPOSAL OF ASSETS
transfer, sell, lend, part with or otherwise dispose of, or deal with,
or grant any option or present or future right to acquire any of its
assets or undertakings or any interest, estate, right, title or
benefit therein or thereto or agree or attempt or purport to do so;
(c) EQUITABLE INTEREST
permit any person other than the Beneficiaries to have any equitable
or beneficial interest in any of its assets or undertakings or any
interest, estate, right, title or benefit therein;
(d) BANK ACCOUNTS
have an interest in any bank account, other than as set out in the
Transaction Documents;
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(e) RESTRICTIONS ON ACTIVITIES
carry on any business other than as described in this Deed and the
Mortgage Sale Agreement;
(f) BORROWINGS
incur any indebtedness in respect of borrowed money whatsoever or give
any guarantee or indemnity in respect of any such indebtedness;
(g) MERGER
consolidate or merge with any other person or convey or transfer its
properties or assets substantially as an entirety to any other person;
(h) EMPLOYEES OR PREMISES
have any employees or premises or subsidiaries;
(i) FURTHER SHARES
issue any further shares;
(j) ACQUISITIONS
acquire any assets other than pursuant to the terms of the Mortgage
Sale Agreement and this Mortgages Trust Deed (whereby any New
Portfolio shall be held by the Mortgages Trustee subject to the
Mortgages Trust); or
(k) UNITED STATES ACTIVITIES
engage in any activities in the United States (directly or through
agents) or derive any income from United States sources as determined
under United States income tax principles or hold any property if
doing so would cause it to be engaged or deemed to be engaged in a
trade or business within the United States as determined under United
States tax principles.
19. POWER TO DELEGATE
19.1 POWER TO DELEGATE
Subject to CLAUSE 19.2, the Mortgages Trustee may (notwithstanding any rule
of law or equity to the contrary) delegate (revocably or irrevocably and
for a limited or unlimited period of time) the performance of all or any of
its obligations and the exercise of all or any of its powers under this
Deed or imposed or conferred on it by law or otherwise to any person or
body of persons fluctuating in number selected by it and any such
delegation may be by power of attorney or in such other manner as the
Mortgages Trustee may think fit and may be made upon such terms and
conditions (including the power to sub-delegate) as the Mortgages Trustee
may think fit.
19.2 NO FURTHER APPOINTMENTS
Notwithstanding the provisions of CLAUSE 19.1, the Mortgages Trustee shall
not appoint any agent, attorney or other delegate having power to act in
respect of the Trust Property unless it
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is directed in writing to do so by the Beneficiaries. The appointment of
any agent, attorney or other delegate shall terminate immediately upon the
occurrence of a Trigger Event.
20. POWERS OF INVESTMENT
Save as expressly provided for in this Deed, the Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement, the
Mortgages Trustee shall have no further or other powers of investment with
respect to the Trust Property and neither the Trustee Act 2000 nor any
other provision relating to trustee powers of investment implied by statute
or general law shall apply to the Mortgages Trust and, for the avoidance of
doubt, the statutory power to accumulate income conferred on trustees by
Section 31 of the Trustee Act 1925 is expressly excluded.
21. OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE
21.1 NO ACTION TO IMPAIR TRUST PROPERTY
Except for actions expressly authorised by this Deed, the Mortgages Trustee
shall take no action reasonably likely to impair the interests of the
Beneficiaries in any Trust Property now existing or hereafter created or to
impair the value of any Loan or its Related Security subject to the
Mortgages Trust.
21.2 LITIGATION
The Mortgages Trustee must not prosecute or defend any legal or other
proceedings anywhere in the world (at the cost of the Trust Property)
unless it obtains legal or other advice that it is in the interests of the
Beneficiaries to do so.
21.3 NO IMPLIED DUTIES
The duties and obligations of the Mortgages Trustee under the Mortgages
Trust shall be determined solely by the express provisions of this Deed
(but without prejudice to the duties and obligations of the Mortgages
Trustee under any of the other Transaction Documents). The Mortgages
Trustee shall not be liable under this Deed except for the performance of
such duties and obligations as shall be specifically set forth in this
Deed. No implied covenants or obligations shall be read into this Deed
against the Mortgages Trustee, and the permissible right of the Mortgages
Trustee to do things set out in this Deed shall not be construed as a duty.
21.4 NO LIABILITY
Neither the Mortgages Trustee, Funding 1 (in its capacity as a Beneficiary
hereunder) nor the Seller (in its capacity as a Beneficiary hereunder)
shall be liable to each other, in the absence of wilful default, negligence
or breach of the terms of this Deed, in respect of any loss or damage which
arises out of the exercise or attempted or purported exercise or failure to
exercise any of their respective powers.
21.5 RELIANCE ON CERTIFICATES
The Mortgages Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accordance with, any resolution, officer's
certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented to it pursuant to the Transaction Documents by the
proper party or parties.
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21.6 RELIANCE ON THIRD PARTIES
The Mortgages Trustee may, in relation to these presents, act on the
opinion or advice of or a certificate or any information obtained from any
lawyer, banker, valuer, broker, accountant, financial adviser, securities
dealer, merchant bank, computer consultant or other expert in the United
Kingdom or elsewhere and shall not, provided that it shall not have acted
fraudulently or in breach of any of the provisions of the Transaction
Documents, be responsible for any loss occasioned by so acting. Any such
opinion, advice, certificate or information may be sent or obtained by
letter, telemessage, telex, cable or facsimile device and the Mortgages
Trustee shall not be liable for acting on any opinion, advice, certificate
or information purporting to be so conveyed although the same shall contain
some error or shall not be authentic, provided that such error or lack of
authenticity shall not be manifest.
22. NO RETIREMENT OF MORTGAGES TRUSTEE
22.1 NO RETIREMENT
The Mortgages Trustee shall not, and shall not purport to, retire as the
trustee of the Mortgages Trust or appoint any additional trustee of the
Mortgages Trust and shall have no power to retire or appoint any additional
trustee under the Trustee Act 1925 or otherwise.
22.2 NO REPLACEMENT
Neither the Seller nor Funding 1 shall at any time remove or purport to
remove and/or replace the Mortgages Trustee as the trustee of the Mortgages
Trust.
22.3 NO TERMINATION
Prior to the payment by Funding 1 of all amounts owing under the
Intercompany Loan Agreements and under the Transaction Documents, neither
the Seller nor Funding 1 shall at any time, except in accordance with the
provisions of CLAUSES 16 and 23, terminate or purport to terminate the
Mortgages Trust and, in particular, but without prejudice to the generality
of the foregoing, the Seller and Funding 1 shall not in reliance on their
absolute beneficial interests in the Trust Property call for the transfer
to them or vesting in them of the legal estate in all or any part of the
Trust Property.
23. TERMINATION
The Mortgages Trust shall terminate in respect of the Trust Property (if
any then remains) upon the later to occur of:
(a) the date upon which the Funding 1 Share of the Trust Property is zero;
and
(b) any other date agreed in writing by Funding 1 and the Seller.
24. FURTHER ASSURANCES
The parties agree that they will co-operate fully to do all such further
acts and things and execute any further documents as may be necessary or
desirable to give full effect to the arrangements contemplated by this
Deed.
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25. AMENDMENTS
25.1 AMENDMENTS AND WAIVERS
Without prejudice to CLAUSE 25.8 of the Funding 1 Deed of Charge, no
amendment or waiver of any provision of this Deed nor consent to any
departure by any of the parties therefrom shall in any event be effective
unless the same shall be in writing and signed by each of the parties to
this Deed. In the case of a waiver or consent, such waiver or consent shall
be effective only in the specific instance and as against the party or
parties giving it for the specific purpose for which it is given.
25.2 ENTIRE AGREEMENT
This Deed contains a final and complete integration of all prior
expressions by the parties with respect to the subject matter of this Deed
and constitutes the entire agreement among the parties with respect to the
subject matter of this Deed superseding all prior oral or written
understandings other than the other Transaction Documents.
26. NON PETITION COVENANT
The Seller hereby agrees that it shall not institute against either Funding
1 or the Mortgages Trustee any winding-up, administration, insolvency or
similar proceedings so long as any sum is outstanding under any
Intercompany Loan Agreement for the duration of one year plus one day since
the last day on which any such sum was outstanding.
27. NO PARTNERSHIP OR AGENCY
Nothing in this Deed shall be taken to constitute or create a partnership
between any of the parties to this Deed or to make or appoint the Seller
the agent of Funding 1 (or vice versa).
28. CALCULATIONS
In the absence of manifest error, any determination or calculation made by
or on behalf of the Mortgages Trustee in connection with the provisions of
this Deed shall be deemed to be conclusive.
29. NO WAIVER; REMEDIES
No failure on the part of any party to this Deed to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy preclude any
other or further exercise thereof or the exercise of any other right or
remedy. The remedies in this Deed are cumulative and not exclusive of any
remedies provided by law.
30. SEVERABILITY
Where any provision in or obligation under this Deed shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations under this Deed,
or of such provision or obligation in any other jurisdiction, shall not be
affected or impaired thereby.
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31. TAX
31.1 Any payment by Funding 1 to the Seller to increase its share of the Trust
Property shall be inclusive of value added tax (if any).
31.2 Any payment by the Seller to Funding 1 which would increase its share of
the Trust Property shall be exclusive of VAT (if any).
31.3 Any stamp duty or stamp duty reserve tax in respect of any increase in
Funding 1's share of the Trust Property shall be payable by the Seller.
32. CONFIDENTIALITY
32.1 GENERAL OBLIGATION OF CONFIDENTIALITY
Unless otherwise required by applicable law, and subject to CLAUSE 32.2
below, each of the parties agrees not to disclose to any person any
information relating to the business, finances or other matters of a
confidential nature of or relating to any other party to this Deed or any
of the Transaction Documents which it may have obtained as a result of
having entered into this Deed or otherwise.
32.2 EXCEPTIONS
The provisions of CLAUSE 32.1 above shall not apply:
(a) to the disclosure of any information to any person who is a party to
any of the Transaction Documents as expressly permitted by the
Transaction Documents;
(b) to the disclosure of any information which is or becomes public
knowledge otherwise than as a result of the wrongful conduct of the
recipient;
(c) to the extent that the recipient is required to disclose the same
pursuant to any law or order of any court or pursuant to any direction
or requirement (whether or not having the force of law) of any central
bank or any governmental or other regulatory or Taxation authority;
(d) to the disclosure of any information to professional advisers who
receive the same under a duty of confidentiality;
(e) to the disclosure of any information with the consent of the parties
to this Deed;
(f) to the disclosure to the Rating Agencies or any of them of such
information as may be requested by any of them for the purposes of
setting or reviewing the rating assigned to the Notes (or any of
them), provided that no information which would disclose the identity
of a Borrower shall be disclosed to the Rating Agencies or any of
them;
(g) to the disclosure of any information disclosed to a prospective
assignee of Funding 1 (provided that it is disclosed on the basis that
the recipient will hold it confidential); or
(h) to any disclosure for the purposes of collecting in or enforcing the
Trust Property or any of it.
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33. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Deed do not intend that any term of this Deed should be
enforced, by virtue of the Contracts (Rights of Third Parties) Act 1999, by
any person who is not a party to this Deed.
34. ADDRESSES FOR NOTICES
Any notices to be given pursuant to this Deed will be sufficiently served
if sent by prepaid first class post, by hand or facsimile transmission and
will be deemed to be given (in the case of facsimile transmission) when
despatched (where delivered by hand) on the day of delivery if delivered
before 17.00 hours on a London Business Day or on the next London Business
Day if delivered thereafter or (in the case of first class post) when it
would be received in the ordinary course of the post and shall be sent:
(a) in the case of the Seller: to Halifax plc (LP/3/3/SEC), at Trinity
Road, Halifax, West Yorkshire HX1 2RG (facsimile number +44 (0)113 235
7511) for the attention of the Head of Mortgage Securitisation with a
copy to HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X
0XX (facsimile number x00 (0)00 0000 0000) for the attention of Head
of Capital Markets and Securitisation;
(b) in the case of the Mortgages Trustee: to Permanent Mortgages Trustee
Limited, 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX, Channel Islands
(facsimile number x00 (0) 0000 000000) for the attention of the
Company Secretary with a copy to HBOS Treasury Services plc, 00 Xxx
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number x00 (0)00 0000 0000)
for the attention of Head of Capital Markets and Securitisation;
(c) in the case of Funding 1: to Permanent Funding (No. 1) Limited,
Xxxxxxxxx House, Guildhall Yard, London, EC2V 5AE (facsimile number
x00 (0) 00 0000 0000) for the attention of the Secretary with a copy
to HBOS Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (0)00 0000 0000) for the attention of Head of
Capital Markets and Securitisation; and
(d) in each case with a copy to The Bank of New York, Xxx Xxxxxx Xxxxxx,
Xxxxxx X00 0XX, (facsimile number x00 (0)00 0000 0000 / 6399) for the
attention of Global Structured Finance - Corporate Trust,
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party to
the others by written notice in accordance with the provisions of this
CLAUSE 33.
35. GOVERNING LAW AND SUBMISSION TO JURISDICTION
35.1 GOVERNING LAW
This Deed is governed by English law.
35.2 SUBMISSION TO JURISDICTION
Each party to this Deed hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts in any action or proceeding arising out
of or relating to this Deed, and hereby irrevocably agrees that all claims
in respect of such action or proceeding may be heard and determined by such
courts. Each party to this Deed hereby irrevocably waives, to the fullest
extent it may possibly do so, any defence or claim that the English courts
are an inconvenient
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forum for the maintenance or hearing of such action or proceeding. The
Mortgages Trustee irrevocably appoints Structured Finance Management
Limited at Xxxxxxxxx House, Guildhall Yard, London EC2V 5AE as its agent
for service of process.
36. EXCLUSION OF TRUSTEE ACT 2000
The Trustee Act 2000 is hereby excluded to the maximum extent permissible,
to the intent that it shall not apply to the trusts constituted by this
Deed and that the parties shall be in the same position as they would be
had that Act not come into force.
IN WITNESS of which this Xxxx has been executed by the parties hereto as a deed
which has been delivered on the date first appearing on page one.
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SIGNATORIES
EXECUTED as a DEED by )
HALIFAX plc )
as Seller, Cash Manager )
and Beneficiary ) ...................................
acting by its attorney )
in the presence of ) (as attorney for HALIFAX PLC)
Witness's Signature:......................
Name: .......................
Address: .......................
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 1) )
LIMITED as Beneficiary ) ...................................
acting by two directors ) ...................................
EXECUTED as a DEED on behalf of )
PERMANENT MORTGAGES TRUSTEE )
LIMITED, a company incorporated in
Jersey, )
Channel Islands, by )
being a person who, in )
accordance with the laws of that
territory is acting )
under the authority of the company,
in the presence )
of: ) ...................................
Witness's Signature: .....................
Name: .......................
Address: .......................
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EXECUTED as a DEED by )
SFM OFFSHORE )
LIMITED as Share Trustee of the )
Mortgages Trustee )
acting by its attorney ) ...................................
in the presence of: ) (as attorney for SFM OFFSHORE
LIMITED)
Witness's Signature: .....................
Name: .....................
Address: .....................
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