Exhibit 4.3.1
AMENDED AND RESTATED MORTGAGE SALE AGREEMENT
[*] OCTOBER 2007
BANK OF SCOTLAND PLC
AS SELLER AND A BENEFICIARY
AND
PERMANENT FUNDING (NO. 1) LIMITED
AS FUNDING 1 AND A BENEFICIARY
AND
PERMANENT FUNDING (NO. 2) LIMITED
AS FUNDING 2 AND A BENEFICIARY
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
AS MORTGAGES TRUSTEE
AND
THE BANK OF NEW YORK
AS FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE
CONTENTS
CLAUSE PAGE
1. Definitions and Construction.........................................3
2. Sale and Purchase of Initial Portfolio...............................3
3. Initial Closing Date.................................................4
4. Sale and Purchase of New Portfolios..................................5
5. Trust of Monies.....................................................11
6. Completion of the Transfer of Loans.................................12
7. Undertakings........................................................14
8. Warranties and Repurchase by the Seller.............................16
9. Other Warranties....................................................20
10. Further Assurance...................................................20
11. Consequences of Breach..............................................21
12. Subordination.......................................................21
13. Non-Merger..........................................................21
14. No Agency or Partnership............................................21
15. Payments............................................................21
16. Amendments, Waivers and Consents....................................22
17. Notices.............................................................22
18. Assignment......................................................... 23
19. Change of Funding 1 Security Trustee and/or Funding 2 Security
Trustee.............................................................23
20. Third Party Rights..................................................24
21. Execution in Counterparts; Severability.............................24
22. Governing Law.......................................................24
SCHEDULE
1. Representations and Warranties......................................25
2. Registered Transfer.................................................33
3. Unregistered Transfer...............................................34
4. Lending Criteria....................................................37
5. Power of Attorney in Favour of Funding 1, Funding 2, the Mortgages
Trustee, the Funding 1 Security Trustee and the Funding 2 Security
Trustee.............................................................41
6. Loan Repurchase Notice..............................................44
7. Assignment of Third Party Rights....................................46
8. Assignment of Halifax Mortgage Re Limited MIG Policies..............49
9. Halifax Mortgage Re Limited MIG Policies Assignment Notice..........53
10. Insurance Endorsement...............................................54
11. Insurance Acknowledgements..........................................55
12. New Portfolio Notice................................................59
13. Forms of Scottish Transfer..........................................62
14. Forms of Scottish Transfer..........................................65
15. Form of Scottish Declaration of Trust...............................68
16. Form of Memorandum of Release.......................................75
17. Re-Assignment of MIG Policies.......................................76
18. Halifax Mortgage Re Limited MIG Policies Re-Assignment Notice.......80
19. Re-Assignment of Third Party Rights.................................81
Signatories..................................................................83
THIS AMENDED AND RESTATED MORTGAGE SALE AGREEMENT (this AGREEMENT) is made as a
deed on [*] October 2007
BETWEEN:
(1) BANK OF SCOTLAND PLC (registered number SC327000) (formerly The
Governor and Company of the Bank of Scotland), a public limited
company incorporated under the laws of Scotland whose registered
office is at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX (acting in its capacities
as the SELLER and a BENEFICIARY);
(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 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X
0XX (acting in its capacities as FUNDING 1 and a BENEFICIARY);
(3) PERMANENT FUNDING (NO. 2) LIMITED (registered number 04441772), a
private limited company incorporated under the laws of England and
Wales, whose registered office is at 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X
0XX (acting in its capacities as FUNDING 2 and a BENEFICIARY);
(4) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel
Islands, whose registered office is at 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx
XX0 0XX, Channel Islands (acting in its capacity as the MORTGAGES
TRUSTEE); and
(5) THE BANK OF NEW YORK, a New York banking corporation, acting through
its offices at Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (acting in its
capacities as the FUNDING 1 SECURITY TRUSTEE, which expression shall
include such company and all other persons or companies for the time
being acting as security trustee (or co-trustee) pursuant to the terms
of the Funding 1 Deed of Charge and the FUNDING 2 SECURITY TRUSTEE,
which expression shall include such company and all other persons or
companies for the time being acting as security trustee (or
co-trustee) pursuant to the terms of the Funding 2 Deed of Charge).
WHEREAS:
(A) Halifax (then in its capacity as the Seller) carried on the business
of, inter alia, originating mortgage loans to individual borrowers
secured on residential properties in England, Wales or Scotland.
(B) Halifax (then in its capacity as the Seller) sold to the Mortgages
Trustee certain of the above mentioned mortgage loans together with
the benefit of their related security on the Initial Closing Date on
the terms and subject to the conditions set out in the Mortgage Sale
Agreement dated 14 June 2002.
(C) The Mortgages Trustee holds all of the above mentioned mortgage loans
as bare trustee for the Beneficiaries upon, with and subject to the
trusts, powers and provisions of the Mortgages Trust Deed.
1
(D) On 12 March 2004 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an
Amended and Restated Mortgage Sale Agreement of the same date and
Halifax (then in its capacity as the Seller) sold a new portfolio of
mortgage loans to the Mortgages Trustee on 12 March 2004 on such
amended terms.
(E) On 22 July 2004 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an
Amended and Restated Mortgage Sale Agreement of the same date and
Halifax (then in its capacity as the Seller) sold a new portfolio of
mortgage loans to the Mortgages Trustee on 22 July 2004 on such
amended terms.
(F) On 18 November 2004 the parties to the Mortgage Sale Agreement agreed
to amend the terms of the Mortgage Sale Agreement as set out in an
Amended and Restated Mortgage Sale Agreement of the same date and
Halifax (then in its capacity as the Seller) sold a new portfolio of
mortgage loans to the Mortgages Trustee on 18 November 2004 on such
amended terms.
(G) On 23 March 2005 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an
Amended and Restated Mortgage Sale Agreement of the same date and
Halifax (then in its capacity as the Seller) sold a new portfolio of
mortgage loans to the Mortgages Trustee on 23 March 2005 on such
amended terms.
(H) On 22 June 2005 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an
Amended and Restated Mortgage Sale Agreement of the same date and
Halifax (then in its capacity as the Seller) sold a new portfolio of
mortgage loans to the Mortgages Trustee on 22 June 2005 on such
amended terms.
(I) On 22 March 2006 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an
Amended and Restated Mortgage Sale Agreement of the same date and
Halifax (then in its capacity as the Seller) sold a new portfolio of
mortgage loans to the Mortgages Trustee on 22 March 2006 on such
amended terms.
(J) On 17 October 2006 Funding 2 and the Funding 2 Security Trustee became
parties to the Mortgage Sale Agreement and the parties to the Mortgage
Sale Agreement agreed to amend the terms of the Mortgage Sale
Agreement as set out in an Amended and Restated Mortgage Sale
Agreement of the same date and Halifax (then in its capacity as the
Seller) sold a new portfolio of mortgage loans to the Mortgages
Trustee on 17 October 2006 on such amended terms.
(K) On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
Xxx 0000, The Governor and Company of the Bank of Scotland was
registered as a public company under the Companies Xxx 0000 and
changed its name to Bank of Scotland plc and the business and all
property and liabilities of Halifax (including its business of
originating mortgage loans and its rights and obligations under the
Mortgage Sale Agreement) were transferred to Bank of Scotland.
(L) The parties to the Mortgage Sale Agreement have agreed to further
amend and restate the terms of the Mortgage Sale Agreement on the date
hereof as set out herein and the Seller may sell new portfolios of
mortgage loans originated by Halifax or by it under the Halifax brand
and their related security to the Mortgages Trustee on such amended
terms.
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IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated [*]
October 2007 (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Agreement) (the
MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
specifically incorporated into this Agreement and, accordingly, the
expressions defined in the Master Definitions and Construction
Schedule (as so amended, varied or supplemented from time to time)
shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Agreement,
including the Recitals hereto and this Agreement shall be construed in
accordance with the interpretation provisions set out in Clause 2 of
the Master Definitions and Construction Schedule.
1.2 Any reference in this Agreement to any discretion, power, right, duty
or obligation on the part of the Mortgages Trustee shall be as
exercised by the Mortgages Trustee subject in each case to the
provisions of Clause 16 of the Mortgages Trust Deed.
1.3 For the purposes of Section 2 of the Law of Property (Miscellaneous
Provisions) Xxx 0000, the terms of the Transaction Documents are, so
far as applicable, incorporated herein.
1.4 The Initial Portfolio contained as Part 1 of the Exhibit to the
Original Mortgage Sale Agreement and any schedule of New Loans
attached to any New Portfolio Notice may be provided in a document
stored upon electronic media (including, but not limited to, a CD-ROM)
in a form acceptable to the Mortgages Trustee, Funding 1 and the
Funding 1 Security Trustee and, as of the Programme Date, Funding 2
and the Funding 2 Security Trustee (each acting reasonably).
1.5 This Agreement amends and restates the Mortgage Sale Agreement made on
the 14 June 2002 as amended and restated on the 6 March 2003, 25
November 2003, 12 March 2004, 22 July 2004, 18 November 2004, 23 March
2005, 22 June 2005, 22 March 2006 and 17 October 2006 (the PRINCIPAL
AGREEMENT). As of the date of this Agreement, any future rights or
obligations (excluding such obligations accrued to the date of this
Agreement) of a party under the Principal Agreement shall be
extinguished and shall instead be governed by this Agreement.
2. SALE AND PURCHASE OF INITIAL PORTFOLIO
2.1 Subject to Clause 2.2, in consideration of the Purchase Price (which
shall be paid in accordance with Clause 3.3) and the covenant of the
Mortgages Trustee to hold the Trust Property upon trust, with and
subject to all the trusts, powers and provisions of the Mortgages
Trust Deed, the Seller hereby agrees to sell to the Mortgages Trustee
with full title guarantee, the Initial Portfolio on the Initial
Closing Date.
2.2 The obligation of the Seller under Clause 2.1 shall be subject to and
conditional upon:
(a) the issue by the First Issuer of the Issuer Notes on the
Initial Closing Date and the borrowing by Funding 1 of the
Term Advances under the First Issuer Intercompany Loan
Agreement;
(b) the constitution of the Mortgages Trust on or prior to the
Initial Closing Date; and
(c) the Transaction Documents in existence on the Initial Closing
Date having been executed and delivered by the parties thereto
on or before the Initial Closing Date.
3
2.3 The sale of the Portfolio shall not include any obligation to pay any
Delayed Cashbacks, Home Cash Reserve Drawings or Flexible Loan
Drawings (if any), which obligation shall at all times, and
notwithstanding the sale of the Portfolio, remain an obligation of the
Seller.
3. INITIAL CLOSING DATE
3.1 (a) A meeting shall take place at 11.00 a.m. on the Initial
Closing Date at the offices of Xxxxx & Xxxxx, Xxx Xxx Xxxxxx,
Xxxxxx XX0X 0XX or such other time or offices as the parties
may agree at which the Seller shall deliver to the Funding 1
Security Trustee or its representative the following
documents:
(i) two originals of the power of attorney dated as at the
Initial Closing Date and substantially in the form set
out in Schedule 5 of the Original Mortgage Sale
Agreement, duly executed by the Seller;
(ii) a certified copy of each of the duly executed
Insurance Acknowledgements;
(iii) a certified copy of each of the duly executed
Insurance Endorsements;
(iv) a duly executed assignment of the Halifax Mortgage Re
Limited MIG Policies to the extent that they relate to
the Mortgages comprised in the Initial Portfolio from
the Seller to the Mortgages Trustee and a certified
copy of a notice (the original of which shall be
served by the Seller by courier or by special
delivery) of such assignment from the Seller to HBOS
Insurance (PCC) Guernsey Limited dated as at the
Initial Closing Date and in the form (mutatis
mutandis) set out in Schedule 8 and Schedule 9 of the
Original Mortgage Sale Agreement respectively and a
certified copy of consent to assignment of the Halifax
Mortgage Re Limited MIG Policies (or acknowledgement
that the Mortgages Trustee will be an insured in
respect of the Initial Portfolio under the Halifax
Mortgage Re Limited MIG Policies following such
assignment) from HBOS Insurance (PCC) Guernsey Limited
in such form as HBOS Insurance (PCC) Guernsey Limited
reasonably requires;
(v) a certificate of a duly authorised officer of the
Seller dated as at the Initial Closing Date attaching
a copy of the board minute of the Seller authorising
its duly appointed representatives to agree the sale
of the Portfolio and authorising execution and
performance of this Agreement, the Servicing
Agreement, the other Transaction Documents to which
the Seller is a party (in any capacity) and all of the
documentation to be entered into pursuant to this
Agreement and confirming that the resolutions referred
to therein are in full force and effect and have not
been amended or rescinded as at the date of the
certificate;
(vi) a duly executed assignment of rights against third
parties comprised in the Initial Portfolio dated as at
the Initial Closing Date and in the form of the
Assignment of Third Party Rights; and
(vii) a solvency certificate from an authorised signatory of
the Seller dated the Initial Closing Date in a form
acceptable to the Mortgages Trustee, Funding 1 and the
Funding 1 Security Trustee (each acting reasonably).
(b) The parties hereto acknowledge that completion on the Initial
Closing Date of the sale to the Mortgages Trustee of all of
the Seller's right, title, interest and benefit in and to the
Initial Portfolio subject to the terms and provisions of the
Mortgages Trust Deed shall occur as indicated in this Clause
3, provided that the matters described in Clauses 6.2, 6.3,
6.4 and 6.5 shall not occur until the relevant time indicated
in Clause 6 or, as applicable, Clause 7.4.
4
3.2 The Seller undertakes that from the Initial Closing Date until the
perfection of the assignment or assignation (as appropriate) in
accordance with Clauses 6.1, 6.2, 6.3, 6.4 and 6.5, the Seller shall
hold the Title Deeds and Customer Files relating to the Portfolio that
are in its possession or under its control or held to its order to the
order of the Mortgages Trustee or as the Mortgages Trustee shall
otherwise direct.
3.3 Subject to fulfilment of the conditions referred to in Clauses 2.2 and
3, the Seller shall be paid the Purchase Price by telegraphic transfer
by Funding 1 on the Initial Closing Date.
3.4 The Seller shall provide all reasonable co-operation to the Mortgages
Trustee, Funding 1, the Funding 1 Security Trustee, and, on and after
the Programme Date, Funding 2 and the Funding 2 Security Trustee to
enable them to carry out their respective duties and enforce their
rights under the Transaction Documents. Without prejudice to the
generality of the foregoing, the Seller shall:
(a) upon reasonable prior notice and during normal office hours,
permit the Mortgages Trustee and/or Funding 1 and/or Funding 2
and/or the Funding 1 Security Trustee and/or the Funding 2
Security Trustee and their respective authorised employees and
agents and other persons nominated by them and approved by the
Seller (such approval not to be unreasonably withheld or
delayed), to review the Customer Files and the Title Deeds in
relation to the Portfolio (subject to such person(s) agreeing
to keep the same confidential but provided that disclosure
shall be permitted to the professional advisors and auditors
of the party to whom such disclosure is made and/or to the
extent that such disclosure is required by law or for the
purpose of any judicial or other proceedings); and/or
(b) give promptly all such information and explanations relating
to the Loans and their Related Security as the Mortgages
Trustee and/or Funding 1 and/or Funding 2 and/or the Funding 1
Security Trustee and/or the Funding 2 Security Trustee may
reasonably request (including a list of the Loans and their
Related Security in the Portfolio along with details of the
location of the Title Deeds relating thereto),
provided that prior to completion in accordance with Clause 6, the
Seller shall be under no obligation to provide any information or
documentation to any person other than the Mortgages Trustee and/or
Funding 1 and/or Funding 2 and/or the Funding 1 Security Trustee
and/or the Funding 2 Security Trustee or their respective employees
and/or professional advisors or allow such person access to the
Customer Files or Title Deeds if to do so would result in a breach of
the applicable Mortgage Terms or the Data Protection Xxx 0000.
4. SALE AND PURCHASE OF NEW PORTFOLIOS
4.1 Subject to fulfilment of the conditions set out in Clauses 2.2, 3.1,
4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in
Clause 2.3, if the Seller shall, at any time and from time to time
serve a properly completed New Portfolio Notice on the Mortgages
Trustee, Funding 1 and Funding 2 with a copy to each of the Funding 1
Security Trustee and the Funding 2 Security Trustee (such service to
be in the Seller's sole discretion), the Seller agrees that on the
date for completion of the sale specified in such New Portfolio Notice
the Seller shall sell with full title guarantee (or in relation to
rights and assets situated in or governed by the law of Scotland with
absolute warrandice) to the Mortgages Trustee the relevant New
Portfolio.
4.2 The conditions to be met as at each Sale Date are:
(a) no event of default under the Transaction Documents shall have
occurred which is continuing as at the relevant Sale Date;
5
(b) (i) (in the case of Funding 1) the Principal Deficiency Ledger
shall not have a debit balance as at the most recent Funding 1
Interest Payment Date after applying all Funding 1 Available
Revenue Receipts on that Funding 1 Interest Payment Date and
(ii) (in the case of Funding 2) the Funding 2 Principal
Deficiency Ledger (other than the Subordinated Loan Tranche
Principal Deficiency Sub-Ledger) shall not have a debit
balance as at the most recent Funding 2 Interest Payment Date
after applying all Funding 2 Available Revenue Receipts on
that Funding 2 Interest Payment Date;
(c) the Mortgages Trustee is not aware that the purchase of the
New Portfolio on the relevant Sale Date would adversely affect
the then current rating by the Rating Agencies of any of the
Notes of any Funding 1 Issuer or of the Master Issuer;
(d) as at the relevant Sale Date, the Seller has not received any
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 S&P and F1 by Fitch at the time
of, and immediately following, the sale of New Loans to the
Mortgages Trustee;
(e) as at the relevant Sale Date, the aggregate Outstanding
Principal Balance of the Loans in the Mortgages Trust, in
respect of which the aggregate amount in arrears is more than
three times the Monthly Payment then due, is less than 5% of
the aggregate Outstanding Principal Balance of the Loans in
the Mortgages Trust unless the Rating Agencies have confirmed
to Funding 1 and Funding 2 or to the Funding 1 Security
Trustee and the Funding 2 Security Trustee that the then
current ratings of the Notes of any Funding 1 Issuer or of the
Master Issuer will not be reduced, withdrawn of qualified;
(f) except where Funding 1 and/or Funding 2 (as applicable) pays
amounts to the Seller in consideration of New Loans to be sold
to the Mortgages Trustee on the relevant Sale Date, the
aggregate Outstanding Principal Balance (excluding Arrears of
Interest) of New Loans transferred in any one Interest Period
must not exceed 15% of the aggregate Outstanding Principal
Balance of Loans (excluding Arrears of Interest) in the
Mortgages Trust as at the beginning of that Interest Period;
(g) the sale of the New Portfolio on the relevant Sale Date does
not result in the product of WAFF and WALS for the Loans in
the Portfolio after such purchase calculated on the relevant
Sale Date (in the same way as for the Initial Portfolio (or as
agreed by the Servicer and the Rating Agencies from time to
time)) exceeding the product of WAFF and WALS for the Loans in
the Portfolio calculated on the most recent Closing Date plus
0.25%;
(h) the yield (as calculated below) of the Loans in the Mortgages
Trust together with the yield of the New Loans to be sold to
the Mortgages Trustee on the relevant Sale Date (together for
the purposes of this paragraph, the RELEVANT LOANS) is at
least 0.50% greater than the weighed average of Sterling-LIBOR
for three-month sterling deposits as at the previous Funding 2
Interest Payment Date and Sterling-LIBOR for three-month
sterling deposits as at the previous Funding 1 Interest
Payment Date, after taking into account the average yield on
the Loans which are Variable Rate Loans, Tracker Rate Loans
and Fixed Rate Loans and the margins on the Funding 1 Swap(s)
and the Funding 2 Swap(s), in each case as at the relevant
Sale Date. The yield of the Relevant Loans is to be calculated
as follows:
(AxB)+(Cx(D-E+F))+(Gx(H+I))/J
6
where,
(i) = the Outstanding Principal Balance, on the
relevant Sale Date, of the Relevant Loans which
are Fixed Rate Loans;
(ii) = the fixed interest rate receivable by Funding 1
under the Funding 1 Swap(s) and by Funding 2
under the Funding 2 Swap(s), in each case as at
the relevant Sale Date;
(iii) = the Outstanding Principal Balance, on the
relevant Sale Date, of the Relevant Loans which
are Variable Rate Loans;
(iv) = the weighted average Variable Base Rate of the
Relevant Loans which are Variable Rate Loans on
the relevant Sale Date;
(v) = the Variable Rate Swap SVR for the Relevant
Loans which are Variable Rate Loans on the
relevant Sale Date;
(vi) = the variable interest rate receivable by
Funding 1 under the Funding 1 Swap(s) and by
Funding 2 under the Funding 2 Swap(s), in each
case as at the relevant Sale Date;
(vii) = the Outstanding Principal Balance, on the
relevant Sale Date, of the Relevant Loans which
are Tracker Rate Loans;
(viii) = the tracker interest rate receivable by Funding
1 under the Funding 1 Swap(s) and by Funding 2
under the Funding 2 Swap(s), in each case as at
the relevant Sale Date;
(ix) = the weighted average margin of the Relevant
Loans which are Tracker Rate Loans over or
under the Bank of England repo rate on the
relevant Sale Date; and
(x) = the Outstanding Principal Balance of the
Relevant Loans on the relevant Sale Date;
(i) the sale of the New Loans on the relevant Sale Date does not
result in the loan-to-value ratio of the Loans and the New
Loans after application of the LTV Test on the relevant Sale
Date exceeding the loan-to-value ratio (based on the LTV Test)
of Loans in the Portfolio on the most recent Closing Date plus
0.25%;
(j) the sale of the New Loans on the relevant Sale Date does not
result in Loans (other than Fixed Rate Loans) which, after
taking into account the Funding 1 Swap(s) and the Funding 2
Swap(s), will yield less than Sterling-LIBOR plus 0.50% as at
the relevant Sale Date and that have more than two years
remaining on their incentive period accounting for more than
15% of the aggregate Outstanding Principal Balance of all
Loans comprising the Trust Property;
(k) the sale of the New Loans on the relevant Sale Date does not
result in the Fixed Rate Loans which have more than one year
remaining on their incentive period accounting for more than
50% of the aggregate Outstanding Principal Balance of Loans
comprised in the Trust Property;
7
(l) no sale of New Loans may occur, if, as at the relevant Sale
Date, the Step-up Date in respect of any Note issued by a
Funding 1 Issuer issued after 1 January 2003 and still
outstanding has been reached and such Note issued by any
Funding 1 Issuer has not been redeemed in full. For the
avoidance of doubt, this prohibition on the sale of New Loans
to the Mortgages Trustee shall remain in effect only for so
long as any such Note issued by any Funding 1 Issuer remains
outstanding and, upon its redemption, the sale of New Loans to
the Mortgages Trustee may be resumed in accordance with the
terms of this Agreement;
(m) no sale of new Loans may occur, if, as at the relevant Sale
Date, the Step-up Date in respect of any Note issued by the
Master Issuer after the Programme Date and still outstanding
has been reached and such Note has not been redeemed in full.
For the avoidance of doubt, this prohibition on the sale of
New Loans to the Mortgages Trustee shall remain in effect only
for so long as any such Note remains outstanding and, upon its
redemption, the sale of New Loans to the Mortgages Trustee may
be resumed in accordance with the terms of this Agreement;
(n) as at the Sale Date, (i) (in the case of Funding 1) the
adjusted General Reserve Fund is equal to or greater than the
General Reserve Fund Threshold and (ii) (in the case of
Funding 2) the Funding 2 General Reserve Fund is equal to or
greater than the Funding 2 General Reserve Fund Threshold;
(o) if the sale of New Loans includes the sale of New Loan Types
to the Mortgages Trustee, the Funding 1 Security Trustee and
the Funding 2 Security Trustee have received written
confirmation from each of the Rating Agencies that such New
Loan Types may be sold and assigned to the Mortgages Trustee
and that such sale of New Loan Types would not have an adverse
effect on the then current ratings of the Notes of any Funding
1 Issuer or of the Master Issuer;
(p) each of the Funding 1 Swap Agreement and the Funding 2 Swap
Agreement has been modified as required (or, if appropriate,
Funding 1 and/or Funding 2 has entered into a new swap
agreement) to hedge against the interest rates payable in
respect of such New Loans and the floating rate of interest
payable on the Intercompany Loan and the Master Intercompany
Loan (respectively); and
(q) no Trigger Event has occurred on or before the relevant Sale
Date;
provided that the Mortgages Trustee may vary or waive the conditions
set out in this Clause 4.2 where it has received written confirmation
from each of S&P and Fitch that such variation or waiver will not
cause the ratings of the Notes of any Funding 1 Issuer or of the
Master Issuer to be reduced, withdrawn or qualified. In this Clause
4.2 references to any Monthly Payment due at any date means the
Monthly Payment payable in respect of the month in which that date
falls.
4.3 The obligations of the Seller under Clause 4.1 shall be subject to and
conditional upon no Insolvency Event having occurred which is
continuing as at the relevant Sale Date.
4.4 Subject to fulfilment of the conditions referred to in Clauses 4.2,
4.3, 4.4, 4.5 and 4.6, the consideration to be provided to the Seller
for the sale and assignment of the New Portfolio to the Mortgages
Trustee on a Sale Date shall be the aggregate of:
(a) the payment by Funding 1 and/or Funding 2 (as applicable) to
the Seller by telegraphic transfer on the relevant Sale Date
of the proceeds of:
8
(i) (in the case of Funding 1) the Term Advances under any
Intercompany Loan Agreement advanced to Funding 1 by a
Funding 1 Issuer for such purpose; and/or
(ii) (in the case of Funding 2) any Loan Tranche under the
Master Intercompany Agreement advanced to Funding 2 by
the Master Issuer for such purpose; and/or
(iii) (in the case of Funding 1 or Funding 2) any New
Intercompany Loan made by a New Issuer to Funding 1 or
Funding 2 under a New Intercompany Loan Agreement for
such purpose;
(b) the covenant by Funding 1 and Funding 2 to pay, at a later
date, Deferred Consideration to the Seller; and/or
(c) the covenant of the Mortgages Trustee to hold the Trust
Property on trust for the Seller (as to the Seller Share),
Funding 1 (as to the Funding 1 Share) and Funding 2 (as to the
Funding 2 Share) pursuant to the terms of the Mortgages Trust
Deed.
4.5 (a) On the date of the sale of the relevant New Portfolio the
Seller shall deliver to the Funding 1 Security Trustee and the
Funding 2 Security Trustee or their respective representatives
the following documents:
(i) on the date of the first sale of a relevant New
Portfolio including Scottish Loans:
(A) two originals of the power of attorney dated as
at the Sale Date and substantially in the form
set out in Schedule 5 hereof duly executed by
the Seller;
(B) a certified copy of each of the duly executed
Insurance Acknowledgements; and
(C) a certified copy of each of the duly executed
Insurance Endorsements;
(ii) a duly executed assignment of the Halifax Mortgage Re
Limited MIG Policies to the extent that they relate to
the Mortgages comprised in the relevant New Portfolio
from the Seller to the Mortgages Trustee and a
certified copy of a notice (the original of which
shall be served by the Seller by courier or by special
delivery) of such assignment from the Seller to HBOS
Insurance (PCC) Guernsey Limited dated as of the
relevant Sale Date and in the form (mutatis mutandis)
set out in Schedule 8 and Schedule 9 hereof
respectively and a certified copy of consent to
assignment of the Halifax Mortgage Re Limited MIG
policies (or acknowledgement that the Mortgages
Trustee will be an insured under the Halifax Mortgage
Re Limited MIG Policies following the assignment) from
HBOS Insurance (PCC) Guernsey Limited in such form as
HBOS Insurance (PCC) Guernsey Limited reasonably
requires;
(iii) a duly executed assignment of rights against third
parties comprised in the relevant New Portfolio dated
as at the relevant Sale Date and in the form of the
Assignment of Third Party Rights;
(iv) a certified copy of each of the duly executed
Insurance Acknowledgements;
9
(v) on any Sale Date that Funding 1 and/or Funding 2 (as
applicable) provides consideration for New Loans to be
sold to the Mortgages Trustee pursuant to Clause
4.4(a) above only, a certificate of a duly authorised
officer of the Seller dated as at the relevant Sale
Date attaching either (A) a copy of the board minute
referred to in Clause 3.1(a)(v) or (B) any board
minutes or considerations, notes and resolutions of
the Seller or its duly authorised delegate (as
applicable) authorising its duly appointed
representatives to agree the sale of a New Portfolio,
and authorising the execution and performance of the
Transaction Documents to which the Seller is party, in
each case confirming that the resolutions referred to
therein are in full force and effect and have not been
amended or rescinded as at the date of the
certificate;
(vi) on any Sale Date that Funding 1 and/or Funding 2 (as
applicable) provides consideration for New Loans to be
sold to the Mortgages Trustee pursuant to Clause
4.4(a) above only, a solvency certificate from an
authorised signatory of the Seller dated as at the
relevant Sale Date; and
(vii) a Scottish Declaration of Trust in respect of any
Scottish Loans and their Related Security comprised in
the relevant New Portfolio, in the form (mutatis
mutandis) set out in Schedule 15 and with the annexure
thereto duly completed, duly executed by the Seller,
the Mortgages Trustee, Funding 1 and Funding 2.
(b) The parties hereto acknowledge that completion on each relevant Sale
Date of the sale to the Mortgages Trustee of all of the Seller's
right, title, interest and benefit in and to the relevant New
Portfolio subject to the terms and provisions of the Mortgages Trust
Deed shall occur as indicated in this Clause 4 PROVIDED THAT the
matters described in Clauses 6.5 and 6.6 shall not occur until the
relevant time indicated in Clause 6 or, as applicable, Clause 7.4.
4.6 (a) The Seller undertakes that from the relevant Sale Date until
the perfection of the assignment or assignation (as
appropriate) in accordance with Clauses 6.1, 6.2, 6.3, 6.4 and
6.5, the Seller shall hold the Title Deeds and Customer Files
relating to the New Portfolio that are in its possession or
under its control or held to its order to the order of the
Mortgages Trustee or as the Mortgages Trustee shall direct.
(b) The Seller undertakes that within three (3) London Business
Days of the Sale Date to provide the Mortgages Trustee, the
Funding 1 Security Trustee and the Funding 2 Security Trustee
with an updated, complete and accurate list of the Loans and
their Related Security which comprise the New Portfolio which
may be provided in a document stored upon electronic media
(including, but not limited to a CD-Rom) in a form acceptable
to the Mortgages Trustee, the Funding 1 Security Trustee and
the Funding 2 Security Trustee (each acting reasonably).
4.7 Prior to the earlier to occur of:
(a) a Trigger Event; and
(b) the later of:
(A) if Funding 1 does not enter into a New Intercompany
Loan Agreement, the Funding 1 Interest Payment Date in
September 2012 or (B) on each occasion that Funding 1
enters into a New Intercompany Loan Agreement, the
latest Funding 1 Interest Payment Date specified by
Funding 1 by notice in writing to the Seller, Funding
2 and the Mortgages Trustee as applying in relation to
this covenant and the latest occurring Step-up Date
for any Series and Class of Notes of the Master Issuer
the
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proceeds of which the Master Issuer advances to
Funding 2 as a Rated Loan Tranche under the Master
Intercompany Loan Agreement;
(B) any later Funding 2 Interest Payment Date specified by
Funding 2 by notice in writing to the Seller, Funding
1 and the Mortgages Trustee as applying in relation to
this covenant,
the Seller undertakes to use all reasonable endeavours to offer to
sell, in accordance with the provisions of this Clause 4, to the
Mortgages Trustee and the Mortgages Trustee undertakes to use all
reasonable endeavours to acquire from the Seller and to hold pursuant
to the terms of the Mortgages Trust Deed until the earlier of the
occurrence of a Trigger Event and the dates set out in paragraph (b)
above, sufficient New Loans and their Related Security so that the
aggregate Outstanding Principal Balance of Loans in the Portfolio
during the period from and including the most recent Closing Date to
but excluding later of the dates specified in any notice from Funding
1 or Funding 2 (as applicable) given pursuant to paragraph (b) above
is not less than the amount specified in such notice provided that the
Seller shall not be obliged to sell to the Mortgages Trustee, and the
Mortgages Trustee shall not be obliged to acquire, New Loans and their
Related Security if in the reasonable opinion of the Seller the sale
to the Mortgages Trustee of New Loans and their Related Security would
adversely affect the business of the Seller.
4.8 On each Sale Date that Funding 1 and/or Funding 2 (as applicable)
provides consideration for New Loans to be sold to the Mortgages
Trustee pursuant to Clause 4.4(a) above, the Beneficiaries shall
appoint a firm of independent auditors to undertake a due diligence
exercise on a sample of the Customer Files relating to the New Loans
to be sold to the Mortgages Trustee on the relevant Sale Date. The
costs of such independent auditors shall be borne by the relevant
Funding 1 Issuer or the Master Issuer (as applicable) which is making
a Term Advance or a Loan Tranche (as applicable) to Funding 1 or
Funding 2 (as applicable) (which shall be procured by Funding 1 or
Funding 2 (as applicable)).
4.9 By way of additional consideration for the Initial Portfolio and the
New Portfolios, Funding 1 and Funding 2 shall pay Deferred
Consideration to the Seller in the amount and in the manner provided
in the Funding 1 Deed of Charge and the Funding 2 Deed of Charge
respectively. The amount payable under this Clause 4.9 shall be
payable without allocation among the Initial Portfolio and the New
Portfolios and is payable notwithstanding the actual amount of the
Portfolio.
5. TRUST OF MONIES
5.1 Notwithstanding the sales effected by this Agreement, if at, or at any
other time after, a Closing Date (but prior to any repurchase in
accordance with Clause 8.5) the Seller holds, or there is held to its
order, or it receives, or there is received to its order any property,
interests, rights or benefits and/or the proceeds thereof hereby
agreed to be sold, the Seller undertakes to each of the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee that, subject to Clause 6, it will promptly
remit, assign and/or transfer the same to the Mortgages Trustee or, if
appropriate, the Funding 1 Security Trustee and the Funding 2 Security
Trustee and until it does so or to the extent that the Seller is
unable to effect such remittance, assignment, assignation or transfer,
it will hold such property, interests, rights or benefits and/or the
proceeds thereof upon trust for the Mortgages Trustee subject at all
times to the Mortgages Trust.
5.2 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, interests, rights or benefits
relating to:
(a) any Loan or Loans under a Mortgage Account and its Related
Security repurchased by the Seller pursuant to Clause 8.5; or
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(b) (without prejudice to Clause 12) amounts owed by a Borrower to
the Seller which the Seller has not agreed to sell under
Clause 2.1,
and/or the proceeds thereof, the Mortgages Trustee undertakes to the
Seller that it will remit, assign, re-assign, retrocess 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, assignation, assignment, re-assignment, retrocession or
transfer, the Mortgages Trustee undertakes to hold such property,
interests, rights or benefits and/or the proceeds thereof upon trust
for the Seller as the beneficial owner thereof or as the Seller may
direct provided that the Mortgages Trustee shall not be in breach of
its obligations under this Clause 5 if, having received any such
monies and paid them to third parties in error, it pays an amount
equal to the monies so paid in error to the Seller in accordance with
the Servicing Agreement.
6. COMPLETION OF THE TRANSFER OF LOANS
6.1 The assignments or assignations (as appropriate) contemplated by this
Agreement shall be perfected on the twentieth London Business Day
after the earliest to occur of:
(a) the service of an Intercompany Loan Acceleration Notice (in
relation to any Intercompany Loan), a Master Intercompany Loan
Acceleration Notice (in relation to the Master Intercompany
Loan) or a Note Acceleration Notice (in relation to any Notes
of any Funding 1 Issuer or the Master Issuer); or
(b) the Seller being required to perfect the Mortgages Trustee's
legal title to the Mortgages, or procure any or all of the
acts referred to in this Clause 6 by an order of a court of
competent jurisdiction or by any regulatory authority of which
the Seller is a member or any organisation whose members
comprise (but are not necessarily limited to) mortgage lenders
and with whose instructions it is customary for the Seller to
comply; or
(c) it becoming necessary by law to do any or all of the acts
referred to in this Clause 6; or
(d) (i) the Funding 1 Security Trustee certifying that, in its
reasonable opinion, the property, assets and rights of
Funding 1 comprised in the security constituted by the
Funding 1 Deed of Charge or any material part thereof
is/are in jeopardy; or
(ii) the Funding 2 Security Trustee certifying that, in its
reasonable opinion, the property, assets and rights of
Funding 2 comprised in the security constituted by the
Funding 2 Deed of Charge or any material part thereof
is/are in jeopardy,
and (in either case) that the doing of any or all of the acts
referred to in Clauses 6.2 to 6.6 inclusive is necessary in
order materially to reduce such jeopardy; or
(e) unless otherwise agreed in writing by the Rating Agencies, the
Funding 1 Security Trustee and the Funding 2 Security Trustee,
the termination of the Seller's role as Servicer under the
Servicing Agreement; or
(f) the Seller calling for perfection by serving notice in writing
to that effect on the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee and the Funding 2 Security
Trustee; or
(g) the date on which the Seller ceases to be assigned a long term
unsecured, unsubordinated debt obligation rating from S&P of
at least BBB- or from Moody's of at least Baa3 or from Fitch
of at least BBB-; or
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(h) the occurrence of an Insolvency Event in relation to the
Seller; or
(i) the latest of the last repayment dates of the Intercompany
Loan Agreements, the Master Intercompany Loan Agreement and
any New Intercompany Loan Agreement where such Loan has not
been discharged in full.
6.2 Completion of the transfer of the English Mortgages in the Portfolio
shall be effected by:
(a) a Registered Transfer, in the case of English Mortgages over
Registered Land (in the form set out in Schedule 2); and
(b) an Unregistered Transfer, in the case of English Mortgages
over Unregistered Land (in the form set out in Schedule 3).
6.3 Completion of the transfer of the Scottish Mortgages in the Portfolio
shall be effected by:
(a) the completion and registration in the Land Register of
Scotland of an SLR Transfer (in the form set out in Schedule
13), in the case of Scottish Mortgages over Properties title
to which is registered in the Land Register of Scotland; and
(b) the completion and recording in the General Register of
Sasines of a Sasine Transfer (in the form set out in Schedule
14), in the case of Scottish Mortgages over Properties title
to which is recorded in the General Register of Sasines.
6.4 Completion of the transfer of any other matter comprised in the
Portfolio shall be effected by a transfer, conveyance or assignation
in such form as the Mortgages Trustee may reasonably require.
6.5 Subject to Clause 7.5, prior to perfection pursuant to Clause 6.1,
none of the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee will:
(a) submit or require the submission of any notice, form, request
or application to or pay any fee for the registration or
recording of, or the noting of any interest at the Land
Charges Department of the Land Registry or at the Land
Registry or Registers of Scotland in relation to, the
Mortgages Trustee's and/or Funding 1's and/or Funding 2's
interests in the Portfolio;
(b) give or require the giving of any notice to any Borrower of
the assignment or assignation of that Borrower's Loan and its
Related Security to the Mortgages Trustee, the making of any
Scottish Declaration of Trust, the charge by Funding 1 of
Funding 1's interest in that Borrower's Loan and its Related
Security to the Funding 1 Security Trustee pursuant to the
Funding 1 Deed of Charge or the charge by Funding 2 of Funding
2's interest in that Borrower's Loan and its Related Security
to the Funding 2 Security Trustee pursuant to the Funding 2
Deed of Charge; or
(c) send or require to be sent to any solicitor who has acted on
behalf of the Seller in respect of any Mortgage with respect
to which the Seller has not received a complete set of the
Title Deeds a letter or other communication requiring such
solicitor to hold such documents to the order of the Mortgages
Trustee, the Funding 1 Security Trustee and the Funding 2
Security Trustee.
6.6 Within 25 London Business Days following perfection pursuant to Clause
6.1, the Seller will do such of the acts or things referred to in
Clauses 6.2 to 6.5 as the Funding 1 Security Trustee and the Funding 2
Security Trustee or the Mortgages Trustee requires the Seller to do.
13
6.7 The Seller shall indemnify each of the Mortgages Trustee, Funding 1,
Funding 2, Funding 1 Security Trustee and the Funding 2 Security
Trustee from and against any and all costs, fees and expenses
(including, without limitation, legal fees and expenses and any
applicable VAT thereon) which may be incurred by the Mortgages Trustee
and/or Funding 1 and/or Funding 2 and/or the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee by reason of the doing
of any act, matter or thing referred to in this Clause 6 and Clause
7.5.
7. UNDERTAKINGS
7.1 The Mortgages Trustee, Funding 1 and Funding 2 undertake to the Seller
that they will at all times (or will direct the Servicer at all times
to) use reasonable endeavours to administer and enforce (and exercise
their powers and rights and perform their obligations under) the Loans
comprised in the Portfolio and their Related Security in accordance
with the Seller's Policy (for so long as it exists and thereafter in
accordance with such policies as would be applied by a Reasonable,
Prudent Mortgage Lender in the conduct of its business), provided that
if the Seller fails to comply with its obligations to repurchase any
Loan and its Related Security pursuant to Clause 8.5 the Mortgages
Trustee shall be entitled to waive any Early Repayment Fee in respect
of such Loan and its Related Security if, in the Mortgages Trustee's
reasonable opinion, such waiver is reasonably necessary in order to
effect an interest rate change.
7.2 The Seller hereby undertakes to the Mortgages Trustee, Funding 1 and
Funding 2 that, in the event that any Borrower establishes that it has
at any time prior to the Initial Closing Date or, as the case may be,
the relevant Sale Date, paid to the Seller any amounts in excess of
sums due to the Seller as at the date of payment under the Mortgage
Conditions applicable to that Loan, the Seller will reimburse the
Borrower for such overpayment together with any interest, cost or
other expense associated therewith. The Seller further agrees to hold
the Mortgages Trustee, Funding 1 and Funding 2 harmless against any
such claims and to indemnify the Mortgages Trustee, Funding 1 and
Funding 2 on an after Tax basis in relation to any costs, expense,
loss or other claim which may arise in connection therewith. Any
payment made by the Seller to the Mortgages Trustee, Funding 1 and
Funding 2 in discharge of the foregoing indemnity shall be regarded as
a rebate of part of the Purchase Price of the relevant Loan.
7.3 Each of the Seller, the Mortgages Trustee, Funding 1 and Funding 2
undertakes to each other and to Funding 1 Security Trustee and the
Funding 2 Security Trustee that if and to the extent that any
determination shall be made by any court or other competent authority
or any ombudsman in respect of any Loan and its Related Security that:
(a) any term which relates to the recovery of interest under the
Standard Documentation applicable to that Loan and its Related
Security is unfair; or
(b) the interest payable under any Loan is to be set by reference
to HVR 1 or HVR 2 (as applicable) (and not a rate set by the
Seller's successors or assigns or those deriving title from
them); or
(c) the variable margin above the Bank of England repo rate under
any Tracker Rate Loan must be set by the Seller (rather than
by its successors or assigns or those deriving title from
them) and such rate is lower than the rate set by the Seller's
successors or assigns or those deriving title from them; or
(d) the interest payable under any Loan is to be set by reference
to an interest rate other than that set or purported to be set
by either the Servicer or the Mortgages Trustee as a result of
the Seller having more than one variable mortgage rate,
14
then, at the directions of the Beneficiaries, the Mortgages Trustee
will serve upon the Seller a notice in the form of the Loan Repurchase
Notice requiring the Seller to repurchase the relevant Loan and all
other Loans under the relevant Mortgage Account and its Related
Security in accordance with Clause 8.5 (but in the case of a
determination in respect of (b) above, only if at any time on or after
such determination, HVR 1 or HVR 2 (as applicable) shall be below or
shall fall below the standard variable rate of interest set by such
successors or assigns or those deriving title from them).
7.4 The Seller hereby undertakes to the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee that:
(a) if the long term unsecured, unsubordinated and unguaranteed
debt obligations of the Seller cease to be assigned a rating
of Baa2 or higher from Xxxxx'x and BBB or higher from S&P and
BBB or higher from Fitch, the Seller shall deliver to the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee, the Funding 2 Security Trustee and the
Rating Agencies a draft letter of notice to each of the
Borrowers of the sale and purchase effected by this Agreement;
and
(b) if the long term unsecured, unsubordinated and unguaranteed
debt obligations of the Seller cease to be assigned a rating
of Baa3 or higher from Xxxxx'x and BBB- or higher from S&P and
BBB- or higher from Fitch, then the Seller shall, within 20
London Business Days of it becoming aware of such a rating
being assigned, give notice of the sale and purchase effected
by this Agreement to each Borrower.
7.5 The Seller undertakes to the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee and the Funding 2 Security Trustee
that, pending perfection under Clause 6, the Seller:
(a) shall not do or omit to do any act or thing which might, in
the reasonable opinion of the Funding 1 Security Trustee and
the Funding 2 Security Trustee, prejudice the respective
interests of the Mortgages Trustee and/or Funding 1 and/or
Funding 2 and/or the Funding 1 Security Trustee and/or the
Funding 2 Security Trustee (respectively) in the Portfolio;
(b) shall promptly notify the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee in writing if it receives written notice of
any litigation or claim calling into question in any material
way the Seller's or the Mortgages Trustee's title to any Loan
comprised in the Portfolio or its Related Security or if it
becomes aware of any material breach of any of the
Representations and Warranties or other obligations under this
Agreement;
(c) shall, if reasonably required so to do by the Mortgages
Trustee or the Funding 1 Security Trustee and the Funding 2
Security Trustee, participate or join in any legal proceedings
to the extent necessary to protect preserve and enforce the
Seller's and/or the Mortgages Trustee's and/or Funding 1's
and/or Funding 2's and/or the Funding 1 Security Trustee's
and/or the Funding 2 Security Trustee's title to or interest
in any Loan or its Related Security;
(d) shall use all reasonable endeavours to obtain as soon as
reasonably possible:
(i) the title number to each Property in respect of which
a Mortgage is registered at the Land Registry to the
extent that such title number does not appear in the
Exhibit to this Agreement (or, as the case may be, the
relevant New Portfolio Notice); and
(ii) the title number to each Property in respect of which
a Mortgage is registered in the Land Register of
Scotland to the extent that such title number does not
appear in the
15
Exhibit to this Agreement (or, as the case may be, the
relevant New Portfolio Notice or Scottish Declaration
of Trust); and
(e) shall make and enforce claims under the Buildings Policies and
the Halifax Insurance Policies and hold the proceeds of such
claims on trust for the Mortgages Trustee or as the Mortgages
Trustee may direct.
7.6 The Seller hereby further undertakes to the Mortgages Trustee, Funding
1 and Funding 2 that it is and at all times shall remain solely
responsible for funding any Delayed Cashbacks, any Home Cash Reserve
Drawings, any Flexible Loan Drawings and any Retention Loan Drawings
made by a Borrower and for funding any request for any Further Advance
made by a Borrower and, for the avoidance of doubt, none of the
Mortgages Trustee, Funding 1 or Funding 2 will be required to advance
moneys to the Seller or to a Borrower in order to fund such a Delayed
Cashback, Home Cash Reserve Drawing, Flexible Loan Drawing, Retention
Loan Drawing or Further Advance in any circumstances whatsoever.
7.7 The Seller shall grant security powers of attorney to the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee in the form set out in Schedule 5 allowing
any of the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee and the Funding 2 Security Trustee and their
delegates from time to time (inter alia) to set the Seller's Variable
Base Rate in the circumstances referred to in clause 4 of the
Servicing Agreement and/or following perfection pursuant to Clause 6.1
PROVIDED THAT nothing in this Clause 7.7 shall prevent the Seller (or
any of its attorneys from time to time) from setting a higher Seller's
Variable Base Rate than those set or to be set or required or to be
required by the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee.
8. WARRANTIES AND REPURCHASE BY THE SELLER
8.1 (a) The Seller hereby makes the Representations and Warranties:
(i) in respect of each Loan and its Related Security in
the Initial Portfolio on the Initial Closing Date; and
(ii) in relation to each New Loan and its Related Security
in a New Portfolio, on the date of the service of the
relevant New Portfolio Notice and on the relevant Sale
Date.
(b) Each statement comprised in the Representations and Warranties
shall be construed as a separate statement and (save as
expressly provided to the contrary) shall not be limited or
restricted by reference to or inference from the terms of any
other such statement.
(c) The Seller acknowledges:
(i) that the Representations and Warranties are made with
a view to inducing the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (as the case may be) either
to enter into this Agreement and the other Transaction
Documents to which is a party or to agree to purchase
the New Loans and their Related Security comprised in
each New Portfolio, and
(ii) that each of the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee and the Funding 2
Security Trustee has entered into this Agreement and
the other Transaction Documents to which it is a party
in reliance upon the Representations and Warranties
notwithstanding any information in fact possessed or
discoverable by the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1
16
Security Trustee and/or the Funding 2 Security Trustee
or otherwise disclosed to any of them, and
(iii) that prior to entering into this Agreement and the
other Transaction Documents to which each is a party
none of the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee or the Funding 2
Security Trustee has made any enquiries of any matter.
8.2 The Mortgages Trustee's, Funding 1's, Funding 2's, the Funding 1
Security Trustee's and the Funding 2 Security Trustee's sole remedy in
respect of a breach of any of the Representations and Warranties shall
be to take action under this Clause 8 or under Clause 8.4 of the
Mortgages Trust Deed.
8.3 In the event of a material breach of any of the Representations or
Warranties in respect of any Loan and/or its Related Security made
under Clause 8.1 or if any of those Representations or Warranties
proves to be materially untrue as at the Initial Closing Date or, as
the case may be, the relevant Sale Date, and provided that:
(a) the Mortgages Trustee (acting on the directions of Funding 1
and Funding 2) has given the Seller not less than 20 London
Business Days' notice in writing (or such shorter period of
notice as may be agreed between the Mortgages Trustee and the
Seller);
(b) such breach or untruth, where capable of remedy, is not
remedied to the reasonable satisfaction of Funding 1 and
Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee within the 20 London Business Days period
referred to in (a) (or such longer period as Funding 1 and
Funding 2 and the Funding 1 Security Trustee and the Funding 2
Security Trustee may direct the Mortgages Trustee in writing),
the Mortgages Trustee (acting on the directions of Funding 1 and
Funding 2) shall then serve upon the Seller a notice in the form of
the Loan Repurchase Notice set out in Schedule 6 requiring the Seller
to repurchase the relevant Loan and its Related Security (and any
other Loan secured or intended to be secured by that Related Security
or any part of it) in accordance with Clause 8.5.
8.4 (a) If the Seller accepts an application from, or makes an offer
(which is accepted) to, a Borrower for a Further Advance or a
Home Cash Reserve Advance then (save in the case of any Loan
which is then in arrears), at the direction of Funding 1 and
Funding 2 (subject to the prior written consent of the Funding
1 Security Trustee and the Funding 2 Security Trustee), the
Mortgages Trustee will serve upon the Seller a notice in the
form of the Loan Repurchase Notice requiring the Seller to
repurchase the relevant Loan and its Related Security (and any
other Loan secured or intended to be secured by that Related
Security or any part of it) in accordance with Clause 8.5.
17
(b) If the Seller accepts an application from, or makes an offer
(which is accepted) to, a Borrower for a Product Switch and
(except as provided in paragraph (c) below) on the immediately
preceding Distribution Date, the Seller is in breach of the
conditions referred to in Clauses 4.2(a) to (p) inclusive as
if references therein to NEW LOANS and NEW PORTFOLIO were
references to the Loan which would result from the
implementation of such Product Switch and as if references to
SALE DATE were references to the date when the Seller and
relevant Borrower complete such Product Switch then (save in
the case of any Loan which is then in arrears) from and
including the relevant Distribution Date to but excluding the
date when such conditions have been satisfied, at the
direction of Funding 1 and Funding 2 (subject to the prior
written consent of the Funding 1 Security Trustee and the
Funding 2 Security Trustee), the Mortgages Trustee will serve
upon the Seller a notice in the form of the Loan Repurchase
Notice requiring the Seller to repurchase the relevant Loan
and its Related Security (and any other Loan secured or
intended to be secured by that Related Security or any part of
it) in accordance with Clause 8.5.
(c) If the Seller accepts an application from, or makes an offer
(which is accepted) to, a Borrower for a Product Switch, the
effect of which is to extend the final maturity date of the
relevant Loan beyond June 2040 then, at the direction of
Funding 1 and Funding 2 (subject to the prior written consent
of the Funding 1 Security Trustee and the Funding 2 Security
Trustee), the Mortgages Trustee will serve upon the Seller a
notice in the form of the Loan Repurchase Notice requiring the
Seller to repurchase the relevant Loan and its Related
Security in accordance with Clause 8.5 notwithstanding that
the conditions referred to in Clauses 4.2(a) to 4.2(q) have
been satisfied.
(d) For the avoidance of doubt, the Seller shall not accept an
application from nor make an offer (which is accepted) to a
Borrower for a Further Advance, a Home Cash Reserve Advance or
a Product Switch if the relevant Loan to which such Further
Advance, Home Cash Reserve Advance or Product Switch relates
is then in arrears subject only to such exceptions as made on
a case by case basis as would be acceptable to a Reasonable,
Prudent Mortgage Lender provided that the Seller shall not so
act if it would result in any Funding I Issuer, the Master
Issuer, Funding 1, Funding 2 or the Mortgages Trustee
arranging or advising in respect of, administering (servicing)
or entering into a regulated mortgage contract or agreeing to
carry on any of these activities, if any Funding I Issuer, the
Master Issuer, Funding 1, Funding 2 or the Mortgages Trustee
would be required to be authorised under the FMSA to do so.
8.5 Upon receipt of a Loan Repurchase Notice substantially in the form set
out in Schedule 6 duly signed on behalf of the Mortgages Trustee, the
Seller shall sign and return a duplicate copy and shall repurchase
from the Mortgages Trustee, and the Mortgages Trustee shall re-assign
or re-transfer to the Seller free from the Security Interests created
by the Funding 1 Deed of Charge and the Second Supplemental Funding 1
Deed of Charge (and any further supplement to the Funding 1 Deed of
Charge) and the Funding 2 Deed of Charge (and any supplement to the
Funding 2 Deed of Charge), the relevant Loan (and any other Loan
secured or intended to be secured by that Related Security or any part
of it) and their Related Security. Completion of such repurchase shall
take place on the Distribution Date after receipt by the Seller of
such Loan Repurchase Notice or such other date as the Mortgages
Trustee may direct in the Loan Repurchase Notice (provided that the
date so specified by the Mortgages Trustee shall not be later than 90
days after receipt by the Seller of such notice) when the Seller shall
pay to the Mortgages Trustee GIC Account (or as the Mortgages Trustee
shall direct) an amount equal to the aggregate Outstanding Principal
Balance of such Loan or Loans and any Related Security and all Arrears
of Interest and Accrued Interest relating thereto (save for the
repurchase of any Loan and its Related Security which is subject to a
Further Advance, a Home Cash Reserve Advance or a Product Switch
pursuant to Clause 8.4 in which case the Seller shall pay to the
Mortgages Trustee GIC Account (or as the Mortgages Trustee shall
direct) an amount equal to the
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aggregate Outstanding Principal Balance of such Loan and its Related
Security and Accrued Interest relating thereto only) as at the date of
such repurchase and the provisions of Clause 8.6 shall apply.
8.6 On the date of completion of any repurchase of a Loan and its Related
Security in accordance with Clause 8.5 above, the Funding 1 Security
Trustee, the Funding 2 Security Trustee, the Mortgages Trustee,
Funding 1 and Funding 2 shall at the cost of the Seller execute and
deliver, or cause their respective duly authorised attorneys to
execute and deliver, to the Seller:
(a) a memorandum of release of such Loan and its Related Security
from the security constituted by the Funding 1 Deed of Charge,
the Second Supplemental Funding 1 Deed of Charge (and any
further supplement to the Funding 1 Deed of Charge) and the
Funding 2 Deed of Charge (and any supplement to the Funding 2
Deed of Charge) substantially in the form set out in Schedule
16;
(b) in relation to the English Mortgages, if perfection of the
assignment to the Mortgages Trustee has occurred in accordance
with Clause 6:
(i) if the relevant English Mortgage is over Registered
Land, a transfer of such Mortgage to the Seller in the
form of the Registered Transfer; or
(ii) if the relevant English Mortgage is over Unregistered
Land, a transfer of such English Mortgage to the
Seller in the form of the Unregistered Transfer;
(c) in relation to the Scottish Mortgages, if perfection of the
assignation to the Mortgages Trustee has occurred in
accordance with Clause 6:
(i) if the relevant Scottish Mortgage is over a Property
title to which is registered in the Land Register of
Scotland, a transfer by the Mortgages Trustee in
favour of the Seller in a form substantially similar
to an SLR Transfer; and
(ii) if the relevant Scottish Mortgage is over a Property
title to which is recorded in the General Register of
Sasines, a transfer by the Mortgages Trustee in favour
of the Seller in a form substantially similar to a
Sasine Transfer;
(d) a re-assignment or retrocession (as appropriate) of the rights
of the Mortgages Trustee in respect of the relevant Related
Security and a notice of such re-assignment or retrocession
(as appropriate) each in a form reasonably acceptable to the
Seller (which shall, in the case of the re-assignment of the
MIG Policies and notice of such re-assignment, be
substantially in the form set out in Schedule 17 and Schedule
18 hereto respectively and in the case the re-assignment of
rights against third parties, be substantially in the form set
out in Schedule 19); and
(e) a notification to the Servicer that all further sums due in
respect of such repurchased Loan are for the Seller's account.
Upon such completion the Seller shall cease to be under any further
obligation to hold any Title Deeds or other documents relating to such
Loan or Loans and its/their Related Security to the order of the
Mortgages Trustee and if the Mortgages Trustee holds the Title Deeds
it will return them to the Seller. Any repurchase by the Seller of or
in respect of a Loan or Loans and its or their Related Security shall
constitute a discharge and release of the Seller from any claims which
the Mortgages Trustee and/or Funding 1 and/or Funding 2 and/or the
Funding 1 Security Trustee and/or the Funding 2 Security Trustee may
have against the Seller arising from the relevant Representation or
Warranty in relation to that Loan or Loans and its or their Related
Security only but shall not affect
19
any rights arising from a breach of any other express provision of
this Agreement or any Representation or Warranty in relation to any
other Loan and other Related Security.
8.7 After the Seller becomes aware of any event and/or fact which may
reasonably give rise to an obligation under any clause of this
Agreement to repurchase any Loan it shall notify the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee in writing thereof as soon as reasonably
practicable.
8.8 The terms of this Clause 8 shall not prejudice the rights of the
Mortgages Trustee or the Beneficiaries under the Mortgages Trust Deed.
8.9 The parties to this Agreement may, with the prior written consent of
the Funding 1 Security Trustee and the Funding 2 Security Trustee,
waive or amend the Representations and Warranties. In determining
whether to give its consent to the proposed waiver or amendments to
the Representations and Warranties, each of the Funding 1 Security
Trustee and the Funding 2 Security Trustee shall exercise its
discretion (in the case of the Funding 1 Security Trustee) in
accordance with the terms of Clause 25.8 of the Funding 1 Deed of
Charge and (in the case of the Funding 2 Security Trustee) the terms
of Clause 24.8 of the Funding 2 Deed of Charge and (in both cases) in
accordance with Clause 4 of the Controlling Beneficiary Deed.
9. OTHER WARRANTIES
On the date of this Agreement, each Closing Date, and each Sale Date,
the Seller represents and warrants to each of the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee that:
(a) the Seller has not acquired or owned or possessed any rights
in any Funding 1 Issuer, the Master Issuer, the Mortgages
Trustee, Funding 1 or Funding 2 such that it would CONTROL any
of Funding 1, Funding 2, any Funding 1 Issuer or the Master
Issuer within the meaning of Section 416 ICTA; and
(b) there is not any CONNECTION (within the meaning of Section 87
Finance Act 1996) between (i) any Funding 1 Issuer, the Master
Issuer, Funding 1 and/or Funding 2 and (ii) any Borrower.
10. FURTHER ASSURANCE
The parties hereto agree that they will co-operate fully to do all
such further acts and things and execute any further documents that
may be necessary or desirable to give full effect to the transactions
contemplated by this Agreement (but subject always to Clause 6).
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11. CONSEQUENCES OF BREACH
Without prejudice to Clauses 7 and 8, Funding 1, Funding 2, the
Mortgages Trustee, the Funding 1 Security Trustee and the Funding 2
Security Trustee severally acknowledge to and agree with the Seller,
and each of the Funding 1 Security Trustee and the Funding 2 Security
Trustee acknowledges to and agrees with Funding 1, Funding 2 and the
Mortgages Trustee, that the Seller shall have no liability or
responsibility (whether, in either case, contractual, tortious or
delictual, express or implied) for any loss or damage for or in
respect of any breach of, or any act or omission in respect of, any of
its obligations hereunder other than loss or damage directly (and not
indirectly or consequentially) suffered by the Mortgages Trustee
and/or Funding 1 and/or Funding 2 and/or the assets comprised in the
Funding 1 Security constituted by the Funding 1 Deed of Charge and/or
the Funding 2 Security constituted by the Funding 2 Deed of Charge
respectively by reason of such breach, act or omission. For this
purpose (and without limiting the scope of the above exclusion in
respect of indirect or consequential loss or damage) any loss or
damage suffered by the Mortgages Trustee and/or Funding 1 and/or
Funding 2 or such assets as a result of the breach, act or omission in
question also having been or given rise to an Intercompany Loan Event
of Default and/or a Master Intercompany Loan Event of Default or
enforcement of the Funding 1 Security constituted by the Funding 1
Deed of Charge and/or the Funding 2 Security constituted by the
Funding 2 Deed of Charge shall be treated as indirect or consequential
loss or damage PROVIDED THAT this sentence shall not apply to any
direct or non-consequential loss or damage arising from any such
breach, act or omission.
12. SUBORDINATION
The Seller agrees with Funding 1, Funding 2, the Mortgages Trustee,
the Funding 1 Security Trustee and the Funding 2 Security Trustee that
on the enforcement of any Mortgage any sums owed to the Seller by a
Borrower and which are secured under such Mortgage and the rights and
remedies of the Seller in respect of the sums owed to the Seller shall
at all times be subject and subordinated to any sums owed to the
Mortgages Trustee by the Borrower and which are secured under such
Mortgage and to the rights and remedies of the Mortgages Trustee in
respect of such sums owed to the Mortgages Trustee by the Borrower.
13. NON-MERGER
Any term of this Agreement to which effect is not given on the Initial
Closing Date or on any Sale Date (including in particular, but without
limitation, the liability of the Seller under the Representations and
Warranties and the indemnity in Clause 6.7 and the provisions of
Clause 4) shall not merge and shall remain in full force and effect
notwithstanding the sale and purchases contemplated by this Agreement.
14. NO AGENCY OR PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any relationship
of agency, save as expressly provided herein, or partnership between
the parties and that in fulfilling its obligations hereunder, each
party shall be acting entirely for its own account.
15. PAYMENTS
Except as otherwise specifically provided, all payments to be made
pursuant to this Agreement shall be made in sterling in immediately
available funds without exercising or seeking to exercise any right of
set-off as may otherwise exist and shall be deemed to be made when
they are received by the payee and shall be accounted for accordingly
unless failure to receive any payment is due to an error by the
payee's bank.
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16. AMENDMENTS, WAIVERS AND CONSENTS
16.1 Subject to Clauses 2, 3 and 4 of the Controlling Beneficiary Deed (as
applicable) and (in the case of Funding 1) Clause 25 of the Funding 1
Deed of Charge and (in the case of Funding 2) Clause 12 of the Funding
2 Deed of Charge, no amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and
signed by (or by some person duly authorised by) each of the parties
to this Agreement. In the case of a waiver, such waiver shall be
effective only in the specific instance and as against the party or
parties giving it for the specific purpose for which it is given. No
single or partial exercise of, or failure or delay in exercising, any
right under this Agreement shall constitute a waiver or preclude any
other or further exercise of that or any other right.
16.2 Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee will each exercise all rights, powers, benefits
and/or discretions conferred on it under this Agreement (including,
without limitation, in giving its consent, approval or authorisation
to any event, matter or thing requested hereunder) in accordance with
Clauses 2, 3 and 4 of the Controlling Beneficiary Deed (as applicable)
and (in the case of Funding 1) Clause 25 of the Funding 1 Deed of
Charge and (in the case of Funding 2) Clause 12 of the Funding 2 Deed
of Charge.
17. NOTICES
Any notices to be given pursuant to this Agreement to any of the
parties hereto shall be in writing and shall be sufficiently served if
sent by prepaid first class post, by hand or by facsimile transmission
and shall be deemed to be given (in the case of facsimile
transmission) when despatched or (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, Xxxxxxx Xxxx
(XX/0/0/XXX), Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (facsimile
number x00 (0) 000 000 0000) for the attention of the Head of
Mortgage Securitisation with a copy to Bank of Scotland plc,
Treasury Division, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (0)00 0000 0000) for the attention of
Head of Mortgage Securitisation and Covered Bonds;
(b) in the case of Funding 1: to Permanent Funding (No. 1)
Limited, 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile
number x00 (0)00 0000 0000) for the attention of the Secretary
with a copy to Bank of Scotland plc, Treasury Division, 00 Xxx
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number +44 (0)20 7574
8303) for the attention of Head of Mortgage Securitisation and
Covered Bonds;
(c) in the case of Funding 2: to Permanent Funding (No. 2)
Limited, 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile
number x00 (0)00 0000 0000) for the attention of the Secretary
with a copy to Bank of Scotland plc, Treasury Division, 00 Xxx
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number +44 (0)20 7574
8303) for the attention of Head of Mortgage Securitisation and
Covered Bonds;
(d) in the case of the Mortgages Trustee: to Permanent Mortgages
Trustee Limited, 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX,
(facsimile number x00 (0) 0000 000000) for the attention of
the Secretary with a copy to Bank of Scotland plc, Treasury
Division, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile
number x00 (0)00 0000 0000) for the attention of Head of
Mortgage Securitisation and Covered Bonds; and
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(e) in the case of the Funding 1 Security Trustee and the Funding
2 Security Trustee: to The Bank of Xxx Xxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxx X00 0XX (facsimile number + 00 (0)00 0000 0000)
for the attention of Corporate Trust Administration - ABS/MBS,
or to such other address or facsimile number or for the
attention of such other person or entity as may from time to
time be notified by any party to the others by written notice
in accordance with the provisions of this Clause 17.
18. ASSIGNMENT
18.1 Subject always to the provisions of Clause 19, no party hereto shall
be entitled to assign all or any part of its rights or obligations
hereunder to any other party without the prior written consent of each
of the other parties hereto (which shall not, if requested, be
unreasonably withheld) save that Funding 1 and Funding 2 shall be
entitled to assign whether by way of security or otherwise all or any
of its rights under this Agreement without such consent to:
(a) (in the case of Funding 1) the Funding 1 Security Trustee
pursuant to the Funding 1 Deed of Charge; and
(b) (in the case of Funding 2) the Funding 2 Security Trustee
pursuant to the Funding 2 Deed of Charge,
and each of the Funding 1 Security Trustee and the Funding 2 Security
Trustee may at its sole discretion assign all or any of its rights
under or in respect of this Agreement without such consent to any
successor security trustee in exercise of its rights under the Funding
1 Deed of Charge and the Funding 2 Deed of Charge (respectively).
18.2 The Seller acknowledges that on the assignment pursuant to the Funding
1 Deed of Charge by Funding 1 to the Funding 1 Security Trustee of
Funding 1's rights under this Agreement and pursuant to the Funding 2
Deed of Charge by Funding 2 to the Funding 2 Security Trustee of
Funding 2's rights under this Agreement, each of the Funding 1
Security Trustee and the Funding 2 Security Trustee (respectively) may
enforce such rights in its own name without joining Funding 1 or
Funding 2 (respectively) in any such action (which right the Seller
hereby waives) and the Seller hereby waives as against the Funding 1
Security Trustee and the Funding 2 Security Trustee any rights or
equities in its favour arising from any course of dealing between the
Seller and Funding 1 and Funding 2 (respectively).
19. CHANGE OF FUNDING 1 SECURITY TRUSTEE AND/OR FUNDING 2 SECURITY TRUSTEE
19.1 If there is any change in the identity of the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee in accordance with the
Funding 1 Deed of Charge and the Funding 2 Deed of Charge
(respectively), the Seller, the Mortgages Trustee, Funding 1 and/or
Funding 2 shall execute such documents and take such action as the
successor Funding 1 Security Trustee and/or successor Funding 2
Security Trustee (as applicable) and the outgoing Funding 1 Security
Trustee or outgoing Funding 2 Security Trustee (as applicable) may
reasonably require for the purpose of vesting in the successor Funding
1 Security Trustee or successor Funding 2 Security Trustee (as
applicable) the rights and obligations of the outgoing Funding 1
Security Trustee or outgoing Funding 2 Security Trustee (as
applicable) hereunder and releasing the outgoing Funding 1 Security
Trustee or outgoing Funding 2 Security Trustee (as applicable) from
its future obligations under this Agreement and the Seller shall give
notice thereof to the Rating Agencies.
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19.2 It is hereby acknowledged and agreed that by their execution of this
Agreement, neither the Funding 1 Security Trustee nor the Funding 2
Security Trustee shall assume or have any of the obligations or
liabilities of the Seller or Funding 1 or Funding 2 or the Mortgages
Trustee hereunder.
20. THIRD PARTY RIGHTS
A person who is not a party to this agreement may not enforce any of
its terms under the Contracts (Rights of Third Parties) Xxx 0000.
21. EXECUTION IN COUNTERPARTS; SEVERABILITY
21.1 This Agreement may be executed in any number of counterparts (manually
or by facsimile) and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and
the same instrument.
21.2 Where any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations
under this Agreement or of such provision or obligation in any other
jurisdiction shall not be affected or impaired thereby.
22. GOVERNING LAW
22.1 This Agreement shall be governed by the laws of England (provided that
any terms of this Agreement which are particular to Scots law shall be
construed in accordance with the laws of Scotland).
22.2 Each party to this Agreement hereby irrevocably submits to the
non-exclusive jurisdiction of the English courts in any action or
proceeding arising out of or relating to this Agreement, and hereby
irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined by such courts. Each party to
this Agreement hereby irrevocably waives, to the fullest extent it may
possibly do so, any defence or claim that the English courts are an
inconvenient forum for the maintenance or hearing of such action or
proceeding. The Mortgages Trustee irrevocably appoints Structured
Finance Management Limited of 00 Xxxxx Xx. Xxxxx'x Xxxxxx XX0X 0XX as
its agent for service of process.
IN WITNESS WHEREOF the parties hereto have executed and delivered this
Agreement as a deed on the day and year first before written.
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
1. LOANS
1.1 The particulars of the Loans set out in the Exhibit (or, as the case
may be, the relevant New Portfolio Notice and in each Scottish
Declaration of Trust) are true, complete and accurate in all material
respects.
1.2 Each Loan was originated by the Seller and was originated and is
denominated in pounds sterling (or was originated and is denominated
in euro if the euro has been adopted as the lawful currency for the
time being of the United Kingdom).
1.3 Each Loan in the Portfolio as at the most recent Closing Date was made
not earlier than 1 February 1996 and not later than the later of (a)
30 June 2007 and (b) the date specified in the most recent Final
Terms.
1.4 Each Loan matures for repayment not later than (a) June 2040 or (b)
such later date specified in the most recent Final Terms.
1.5 No Loan has or will have an Outstanding Principal Balance of more than
[POUND]500,000.
1.6 The Lending Criteria are the lending criteria applicable to the Loans
and their Related Security.
1.7 Prior to the making of each Initial Advance and Further Advance:
(a) the Lending Criteria and all preconditions to the making of
any Loan were satisfied in all material respects subject only
to such exceptions as made on a case by case basis as would be
acceptable to a Reasonable, Prudent Mortgage Lender; and
(b) the requirements of the relevant MIG Policy were met, so far
as applicable to that Loan.
1.8 (a) Each Loan was made and its Related Security taken or received
substantially on the terms of the Standard Documentation
without any material variation thereto and nothing has been
done subsequently to add to, lessen, modify or otherwise vary
the express provisions of any of the same in any material
respect.
(b) The brochures, application forms, offers, offer conditions and
marketing material distributed by the Seller to the Borrower
when offering a Loan to a Borrower:
(c) do not conflict in any material respect with the terms
applicable to the relevant Loan and its Related Security at
the time that the Loan was entered into;
(d) do not conflict with and would not prohibit or otherwise limit
the terms of, the Transaction Documents or the matters
contemplated thereby, including for the avoidance of doubt and
without limitation:
(e) the assignment or assignation (as appropriate) of the Loans
and their Related Security to the Mortgages Trustee or the
placing of the Loans and their Related Security into trust;
25
(f) the administration of the Loans and their Related Security by
the Servicer or a delegate or sub-contractor of the Servicer
or (for as long as the Seller and the Servicer are the same
legal entity) the appointment of a new Servicer following the
occurrence of an Insolvency Event in relation to the Seller;
and
(g) so far as the Seller is aware to the best of its knowledge,
information and belief, the ability of the Mortgages Trustee
or the Security Trustee to set the variable rate payable under
any Variable Rate Loan independently of (and without regard to
the level of) the Seller's standard variable rate of interest
or if the Seller has more than one standard variable rate of
interest, the relevant Seller's standard variable rate of
interest, subject to any applicable cap on that variable rate
which is not itself linked to any rate set by the Seller and
to set the variable margin above the Bank of England repo rate
under any Tracker Rate Loan independently of (and without
regard to the level of) any differential set by the Seller,
subject to any applicable cap on that variable margin above
the Bank of England repo rate which is not itself linked to
any margin set by the Seller.
(h) There is no restriction on the Seller's successors and assigns
and assignees to the legal title of the Loans (including,
without limitation, the Mortgages Trustee if and when legal
title to the Loans is transferred to it) right:
(i) to set the variable rate payable under any Variable
Rate Loan independently of (and without regard to the
level of) the Seller's standard variable rate of
interest or if the Seller has more than one standard
variable rate of interest, the relevant Seller's
standard variable rate of interest, subject to any
applicable cap on that variable rate which is not
itself linked to any rate set by the Seller (subject to
complying with the obligations under the Standard
Documentation as to changes in interest rates generally
and so that in particular the successors will not be
able to change the interest rate following a transfer
of legal title unless the reasons for changing the
interest rate set out in the Standard Documentation
apply) and provided that in relation to Loans which are
subject to HVR 2, the differential between that rate
and the Loans which are subject to HVR 1 is maintained;
and
(ii) to set the variable margin above the Bank of England
repo rate under any Tracker Rate Loan independently of
(and without regard to the level of) any differential
set by the Seller, subject to any applicable cap on
that variable margin above the Bank of England repo
rate which is not itself linked to any margin set by
the Seller (subject to complying with the obligations
under the Standard Documentation as to changes in
margins generally and so that in particular the
successors will not be able to change the margin
following a transfer of legal title unless the reasons
for changing the margin set out in the Standard
Documentation apply).
1.9 The Seller is under no obligation to make Further Advances (other than
Flexible Loan Drawings (if any), Delayed Cashbacks and Home Cash
Reserve Drawings) or to release retentions or to pay fees or other
sums relating to any Loan or its Related Security to any Borrower.
1.10 Each Borrower has made at least two Monthly Payments in respect of
each Loan.
1.11 Other than with respect to monthly interest payments or as provided in
paragraph 1.12 below, no Borrower is or has, since the date of the
relevant Mortgage, been in material breach of any obligation owed in
respect of the relevant Loan or under the Related Security and
accordingly no steps have been taken by the Seller to enforce any
Related Security.
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1.12 The total amount of arrears of interest or principal, together with
any fees, commissions and premiums payable at the same time as such
interest payment or principal repayment, on any Loan is not on the
relevant Sale Date in respect of any Loan, nor has been during the 12
months immediately preceding the relevant Sale Date more than the
amount of the Monthly Payment then due.
1.13 No Loan is guaranteed by a third party save where the guarantee
constitutes legal, valid and binding obligations of the guarantor
enforceable in accordance with their terms.
1.14 Each Flexible Loan was originated not earlier than 1 November 2004 and
was made under the 2004 Mortgage Conditions (2nd Edition).
1.15 Interest on each Loan is charged in accordance with the Standard
Documentation.
1.16 Interest on each Loan is payable monthly in arrear.
1.17 Each Loan and its Related Security is valid, binding and enforceable
in accordance with its terms and is non-cancellable:
(a) save in relation to any term in any Loan or in its Related
Security, in each case which is not binding by virtue of the
Unfair Terms in Consumer Contracts Regulations 1994 or (as the
case may be) the Unfair Terms in Consumer Contracts
Regulations 1999; and
(b) save in relation to any amount advanced under a Flexible Loan,
any Delayed Cashback, any Home Cash Reserve Drawing and any
other Further Advance, in each case which is not enforceable
by virtue of the Consumer Credit Xxx 0000.
1.18 To the best of the Seller's knowledge, none of the terms in any Loan
or in its Related Security is not binding by virtue of its either (a)
being unfair within the meaning of the Unfair Terms in Consumer
Contracts Regulations 1994 or (as the case may be) the Unfair Terms in
Consumer Contracts Regulations 1999 or (b) not being compliant with
the terms of the Consumer Credit Xxx 0000. In this WARRANTY 1.18,
reference to any legislation shall be construed as a reference to that
legislation as amended, extended or re-enacted from time to time.
1.19 All of the Borrowers are individuals and were aged 18 years or older
at the date he or she executed the relevant Mortgage.
1.20 At least two Monthly Payments have been made in respect of each Loan.
1.21 Each loan in the relevant Portfolio is either:
(a) a Variable Rate Loan, Tracker Rate Loan or Fixed Rate Loan; or
(b) a New Loan Type which each of the Rating Agencies has
confirmed in writing may be included in the relevant New
Portfolio.
2. MORTGAGES
2.1 The whole of the Outstanding Principal Balance on each Loan and any
Arrears of Interest and all Accrued Interest is secured by a Mortgage.
2.2 Each Mortgage is in the form of the relevant pro forma contained in
the Standard Documentation which was applicable at the time the
Mortgage was executed.
27
2.3 Each Mortgage constitutes a valid and subsisting first charge by way
of legal mortgage or (in the case of Scottish Mortgages) first ranking
standard security over the relevant Property subject only in certain
appropriate cases to applications for registration or recording at the
Land Registry or Registers of Scotland which where requisite have been
made and are pending and in relation to such cases the Seller is not
aware of any caution, notice, inhibition or any other matter that
would prevent such registration or recording.
2.4 Each Mortgage has first priority for the whole of the Outstanding
Principal Balance on the Loan and all Arrears of Interest and Accrued
Interest thereon and all future interest, fees, costs and expenses
payable under or in respect of such Mortgage.
2.5 The Seller has and will maintain, all consents, authorisations,
approvals, licences and orders, including without limitation all
authorisations under the FSMA requirements to originate, advise upon
and administer the Loans and Mortgages.
2.6 The Seller has complied and will comply, in all material respects,
with all applicable laws and regulations, including without limitation
the FSA's rules in MCOB, in respect of its advisory activities
relating to, and the origination and administration of the Loans and
Mortgages.
2.7 Each Mortgage in respect of a RTB Loan was made to a Borrower for the
purposes of exercising the right-to-buy or for another approved
purpose (save where a Deed of Postponement has been entered into by
the relevant landlord) and has (or the Seller has the evidence
necessary to ensure that the relevant Mortgage will have) priority
over any statutory charge or standard security granted in favour of
the relevant landlord save in cases where the Mortgage is originated
at a time where there is no more than one year remaining of the RTB
Disposal Period or where adequate insurance is in place.
2.8 The Seller has complied and will comply, in all material respects,
with all applicable laws and regulations including, without
limitation, the ICOB with regard to any insurance related activities
in respect of the Properties.
2.9 Each intermediary who has introduced a Loan to the Seller was, at the
time of the relevant introduction and insofar as required, registered
with the Mortgage Code Register of Intermediaries, the Mortgage Code
Compliance Board or, if the Loan was originated after 31 October 2004,
authorised by the FSA.
3. THE PROPERTIES
3.1 All of the Properties are in England, Wales or Scotland.
3.2 Each Property constitutes a separate dwelling unit (subject to limited
case by case exceptions) and is either freehold, leasehold or (in
Scotland) heritable or held under a long lease.
3.3 Save for children of Borrowers and children of someone living with the
Borrower, every person who, at the date upon which any English
Mortgage was granted, had attained the age of eighteen and was in or
about to be in actual occupation of the relevant Property, is either
named as a Borrower or has signed a Deed of Consent in the form of the
pro forma contained in the Standard Documentation which was applicable
at the time the Mortgage was executed.
3.4 At the date upon which any Scottish Mortgage was granted all necessary
MHA Documentation had been obtained so as to ensure that neither that
Scottish Mortgage nor the related Property is subject to or affected
by any statutory right of occupancy under the Matrimonial Homes
(Family Protection) (Scotland) Xxx 0000 or the Civil Partnership Xxx
0000.
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3.5 No Property has been let otherwise than by way of:
(a) an assured shorthold tenancy which meets the requirements of
Section 19A or Section 20 of the Housing Xxx 0000; or
(b) a short assured tenancy which meets the requirements of
section 32 of the Housing (Scotland) Xxx 0000; or
(c) an assured tenancy;
in each case which meets the Seller's Policy in connection with
lettings to non-owners.
3.6 No Property is the subject of a shared ownership lease arrangement or
staircase purchasing arrangement.
4. VALUERS' AND SOLICITORS' REPORTS
4.1 Not more than twelve months (or a longer period (including in the case
of an inter-group remortgage) as may be acceptable to a Reasonable,
Prudent Mortgage Lender) prior to the grant of each Mortgage (or such
longer period (including in the case of an inter-group remortgage) as
may be acceptable to a Reasonable, Prudent Mortgage Lender) the Seller
received a Valuation Report from a Valuer on the relevant Property (or
such other form of report concerning the valuation of the relevant
Property as would be acceptable to a Reasonable, Prudent Mortgage
Lender), the contents of which were such as would be acceptable to a
Reasonable, Prudent Mortgage Lender.
4.2 The principal amount of the Initial Advance (including any
retention(s) subsequently advanced to the Borrower but disregarding
Capitalised Expenses) is either:
(a) not more than 75% of the lower of the purchase price and the
appraised value of the Property as stated in the Valuation
Report referred to above in paragraph 4.1 (the APPRAISED
VALUE) (or, in case of a remortgage, of the appraised value)
of the Property; or
(b) greater than 75% (but not more than 97%) of the lower of the
purchase price and the appraised value (or, in the case of a
remortgage, of the appraised value), in which case for those
Loans originated prior to 1 January 2001 only that part of the
Initial Advance which exceeds 75% of the lower of the purchase
price and the appraised value (or, in the case of a
remortgage, of the appraised value) is covered under the terms
of a MIG Policy.
4.3 Prior to the taking of each Mortgage (other than a remortgage), the
Seller:
(a) instructed the Seller's solicitor, licensed conveyancer or (in
Scotland) qualified conveyancer to carry out an investigation
of title to the relevant Property and to undertake such other
searches, investigation, enquiries and other actions on behalf
of the Seller as are set out in the instructions which the
Seller issued to the relevant solicitor as are set out in:
(b) the CML's Lenders' Handbook for England and Wales in relation
to English Mortgages;
(c) the Seller's Mortgage Practice Notes in relation to Scottish
Mortgages taken before the CML's Lenders' Handbook for
Scotland was adopted in 2000; or
(d) the CML's Lenders' Handbook for Scotland in relation to
Scottish Mortgages taken after the CML's Lenders' Handbook for
Scotland was adopted in 2000,
29
(e) (or such comparable, predecessor or successor instructions
and/or guidelines as may for the time being be in place),
subject only to such variations made on a case by case basis
as would have been acceptable to a Reasonable, Prudent
Mortgage Lender at the relevant time; or
(f) received a Certificate of Title from the solicitor or licensed
conveyancer or (in Scotland) qualified conveyancer referred to
in paragraph (a) relating to such Property the contents of
which were such as would have been acceptable to a Reasonable,
Prudent Mortgage Lender at that time.
4.4 The benefit of all Valuation Reports, any other valuation report
referred to in paragraph 4.1 and Certificates of Title which were
provided to the Seller not more than two years prior to the date of
this Agreement can be validly assigned to the Mortgages Trustee
without obtaining the consent of the relevant Valuer, solicitor or
licensed conveyancer or (in Scotland) qualified conveyancer.
5. BUILDINGS INSURANCE
5.1 Each Property is insured under:
(a) a buildings insurance policy arranged by the Borrower in
accordance with the relevant Mortgage Conditions or in
accordance with the Alternative Insurance Recommendations; or
(b) the Halifax Policies; or
(c) a Seller-introduced building insurance policy; or
(d) a buildings insurance policy arranged by the relevant
landlord; or
(e) the Properties in Possession Cover.
5.2 No act, event or circumstance has occurred which would adversely
affect the Properties in Possession Cover or entitle the insurers to
refuse to make payment thereunder or to reduce the amount payable in
respect of any claim thereunder.
5.3 All claims under the Properties in Possession Cover have been paid in
full within a reasonable time of the date of submission of the claim
and, save in respect of minor claims, there are no claims outstanding.
5.4 The Seller has maintained and will maintain all consents,
authorisations, approvals, licences and orders, including without
limitation all authorisations under the FSMA, to carry on any
insurance related activities in respect of the Properties.
6. MIG POLICIES
6.1 Where applicable, the MIG Policies are in full force and effect in
relation to the Initial Portfolio or, as the case may be, each New
Portfolio and all premiums thereon have been paid.
6.2 The benefit of the Halifax Mortgage Re Limited MIG Policies can be and
will have been, with effect from the Initial Closing Date or the
relevant Sale Date, as applicable, validly assigned to the Mortgages
Trustee and charged to the Funding 1 Security Trustee and, on and from
the Programme Date, the Funding 2 Security Trustee, insofar as they
relate to the Initial Portfolio or, as the case may be, each New
Portfolio in each case in the manner and to the extent contemplated by
the Transaction Documents.
30
6.3 To the best of the knowledge of the Seller no act, event or
circumstance has occurred which would adversely affect the MIG
Policies or entitle the insurers to refuse to make payment thereunder
or to reduce the amount payable in respect of any claim thereunder
insofar as they relate to the Initial Portfolio or, as the case may
be, each New Portfolio.
6.4 All valid claims under the MIG Policies have been paid in full within
a reasonable time of the date of submission of the claim.
7. THE SELLER'S TITLE
7.1 The Seller has good title to, and is the absolute unencumbered legal
and beneficial owner of, all property, interests, rights and benefits
agreed to be sold and/or assigned by the Seller to the Mortgages
Trustee pursuant to this Agreement free and clear of all mortgages,
charges, liens, Encumbrances, claims and equities (including, without
limitation, rights of set-off or counterclaim and unregistered or
overriding interests which fall within any of the paragraphs of
Schedule 1 or Schedule 3 to the Land Registration Act 2002 (as such
schedules have effect in accordance with section 90(5) and Schedule 12
of the Land Registration Act 2002) or Section 28(1) of the Land
Registration (Scotland) Act 1979 and the Seller is not in breach of
any covenant implied by reason of its selling the Portfolio with full
title guarantee or absolute warrandice (or which would be implied if
the Registered Transfers, Unregistered Transfers or Scottish
Transfers, as applicable, were completed).
7.2 All steps necessary to perfect the Seller's title to the Loans and the
Related Security were duly taken at the appropriate time or are in the
process of being taken, in each case (where relevant) within any
applicable priority periods or time limits for registration with all
due diligence and without undue delay.
7.3 Save for Title Deeds held at the Land Registry or Registers of
Scotland, the Title Deeds and the Customer Files relating to each of
the Loans and their Related Security are held by, or are under the
control of:
(a) the Seller; or
(b) the Seller's solicitors or licensed conveyancers or (in
Scotland) qualified conveyancers to the order of the Seller,
and the Title Deeds held at the Land Registry have been sent to it
with a request that any such Title Deeds will be returned to the
Seller or its solicitors on its behalf.
7.4 Neither the entry by the Seller into this Agreement nor any transfer,
assignment, assignation or creation of trust contemplated by this
Agreement affects or will adversely affect any of the Loans and their
Related Security (including, without limitation, the Insurance
Policies) and the Seller may freely assign and create a trust or
trusts in respect of all its rights, title, interests and benefits
therein as contemplated in this Agreement without breaching any term
or condition applying to any of them.
7.5 The Seller has not knowingly waived or acquiesced in any breach of any
of its rights in respect of a Loan or its Related Security, other than
waivers and acquiescence such as a Reasonable, Prudent Mortgage Lender
might make on a case by case basis.
8. GENERAL
8.1 The Seller has, since the making of each Loan, kept or procured the
keeping of full and proper accounts, books and records showing clearly
all transactions, payments, receipts, proceedings and notices relating
to such Loan.
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8.2 Neither the Seller nor as far as the Seller is aware any of its agents
has received written notice of any litigation, claim, dispute or
complaint (in each case, subsisting, threatened or pending) in respect
of any Borrower, Property, Loan, Related Security, Halifax Policy, MIG
Policy or Properties in Possession Cover which (if adversely
determined) might have a material adverse effect on the Trust Property
or any part of it.
8.3 The Seller has received from each Borrower a variable direct debit
instruction in favour of the Seller signed by the relevant Borrower
and addressed to its bank, variable as to the amount payable by such
Borrower by unilateral notice given from time to time by the Seller to
such Borrower's bank without further instruction or consent from such
Borrower or such other method of payment as may be acceptable to a
Reasonable, Prudent Mortgage Lender.
8.4 There are no authorisations, approvals, licences, orders,
notifications or consents required as appropriate for the Seller to
enter into or to perform the obligations under this Agreement or to
render this Agreement legal, valid, binding, enforceable and
admissible in evidence.
8.5 The Insurance Acknowledgements are valid, binding and enforceable
against the relevant insurer by the Mortgages Trustee, Funding 1
Security Trustee and, on and from the Programme Date, the Funding 2
Security Trustee.
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SCHEDULE 2
REGISTERED TRANSFER
IN THE FORM OF THE LAND REGISTRY FORM TR4 AS SHOWN OVERLEAF WITH SUCH
AMENDMENTS AS THE MORTGAGES TRUSTEE MAY REASONABLY REQUIRE TO GIVE EFFECT TO
THIS AGREEMENT OR IN SUCH OTHER FORM AS THE MORTGAGES TRUSTEE MAY REASONABLY
REQUIRE TO TAKE ACCOUNT OF CHANGES IN LAW OR PRACTICE.
33
SCHEDULE 3
UNREGISTERED TRANSFER
THIS DEED OF TRANSFER OF MORTGAGES is made the day of
BY:
(1) BANK OF SCOTLAND PLC a public limited company incorporated under the
laws of Scotland, whose registered office is at Xxx Xxxxx, Xxxxxxxxx,
XX0 0XX (registered number SC327000) (hereinafter called the
TRANSFEROR) of the one part; and
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED whose registered office is 00
Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX (hereinafter called the
TRANSFEREE) of the other part.
WHEREAS:
(A) By the charges by way of legal mortgage (the MORTGAGES) brief
particulars of which are set out in the Annexure hereto the properties
brief particulars of which are similarly set out became security for
the repayment of the monies therein mentioned.
(B) By a mortgage sale agreement (as amended and/or restated from time to
time) made between, inter alios, the Transferor and the Transferee on
14 June 2002 (as the same may be or have been amended, varied or
supplemented from time to time with the consent of the parties hereto,
the MORTGAGE SALE AGREEMENT), the Transferor agreed to sell and the
Transferee agreed to buy all right, title, interest, benefit and
obligation (both present and future) of the Transferor in and under
those Mortgages and all other mortgages in favour of the Transferor
over such properties which do not relate to registered land for the
consideration mentioned in the said Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
1. In consideration for the sums payable and other consideration
indicated under the Mortgage Sale Agreement (receipt of which is
hereby acknowledged), the Transferor hereby transfers unto the
Transferee with full title guarantee all rights, title, interests,
benefits and obligations (both present and future) of the mortgagee in
and under the Mortgages including for the avoidance of doubt:
(a) the right to demand, xxx for, recover, receive and give
receipts for all principal moneys payable or to become payable
under the relevant Mortgages or the unpaid part thereof and
the interest due or to become due thereon;
(b) the benefit of all securities for such principal moneys and
interest, the benefit of all consents to mortgage signed by
occupiers of the mortgaged properties and the benefit of and
the right to xxx on all covenants with, or vested in, the
mortgagee in relation to each Mortgage and the rights to
exercise all powers of the mortgagee in relation to each
Mortgage;
(c) all the estate and interest in the relevant mortgaged
properties vested in the mortgagee subject to redemption or
cesser; and
34
(d) all causes of action of the mortgagee against any person in
connection with any report, valuation, opinion, certificate,
consent to mortgage or other statement of fact or opinion
given in connection with any Mortgage or affecting the
decision to make the relevant advance.
2. This Deed shall be governed by and construed in accordance with
English law.
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
BANK OF SCOTLAND PLC )
acting by its attorney in )
the presence of: ) __________
Witness's Signature: __________
Name: __________
Address: __________
35
ANNEX 1
[ ]
Account No. Property address Date of Mortgage Borrower
36
SCHEDULE 4
LENDING CRITERIA
LENDING CRITERIA
The Loans in the Initial Portfolio or, as the case may be, the relevant New
Portfolio were originated according to the Seller's lending policy at the
applicable time the Loan was offered. At the Programme Date the Seller's
lending policy included the criteria set out below. However, the Seller retains
the right to revise its lending policy from time to time, and so the criteria
applicable to New Loans may not be the same as those set out below.
1. Types of Property
Properties may be either freehold, leasehold or (in Scotland)
heritable or held under a long lease. In the case of leasehold
properties, the unexpired portion of the lease must in most cases not
expire earlier than 30 years after the term of the Loan, although this
can be reduced to ten years under certain circumstances. The property
must be used solely for residential purposes (with extremely limited
case by case exceptions) and must be in sound structural condition and
repair or be capable of being put into such state. House boats, mobile
homes and any property on which buildings insurance cannot be arranged
are not acceptable. All persons who are to be legal owners of the
Property on completion of the relevant Mortgage must be Borrowers.
All properties have been valued by a valuer approved by the Seller or,
where appropriate, according to a methodology which would meet the
standards of a Reasonable, Prudent Mortgage Lender and which has been
approved by the Seller.
2. Term of Loan
There is no minimum term on home purchase Loans and the maximum term
is 40 years for all loans. A repayment period for a new Further
Advance that would extend beyond the term of the original advance may
also be accepted at the Seller's discretion, subject to the following:
(a) the consent of any subsequent lender or guarantor to the
Further Advance;
(b) the Seller may in its discretion extend the period of the
original advance, provided that, in all leasehold cases, not
less than 30 years (or ten years in certain circumstances) of
the lease must be left unexpired at the end of the term of the
Mortgage; and
(c) the approval of the valuer where the valuer has previously
recommended a term which is shorter than the maximum Loan
terms referred to above.
If a Borrower requests to increase the term of the existing Loan, the
maximum term for a repayment Loan is 25 years from the date from which
the extended term is granted. However, the total term from the start
date of the account must not exceed 40 years.
If a Borrower or guarantor is already retired or a mortgage term is
requested that will take the Borrower/guarantor's term beyond the
anticipated retirement age, specific procedures must be followed by
the Seller.
37
3. Age of Applicant
All Borrowers must be aged 18 or over. There is no maximum age limit.
However, if the term of the Mortgage extends into retirement, the
Seller will attempt to ascertain the Borrower's anticipated income in
retirement. If the Seller determines the Borrower will not be able to
afford the Mortgage into retirement, the application will be declined.
If the Borrower is already retired, the Seller will consider the
Borrower's ability to support the Loan.
4. Loan to Value (or LTV) Ratio
The maximum original LTV ratio of Loans in the Initial Portfolio is
97%. At the date of this Agreement, for Properties of [POUND]250,000
or less, the Seller may lend up to 97% of the improved valuation of
the Property (the original valuation plus the increase in value
deriving from any improvements). For Properties in excess of
[POUND]250,000, the permissible LTV ratio decreases as the property
value increases. The Seller will not provide Loans in excess of 100%
of the sum of the purchase price and the increase in value deriving
from any improvements.
All lending (with the exception of loans secured against new build
properties) for new purchases is based on a maximum of the lower of
purchase price or valuation. For example, if the value of a property
was [POUND]100,000 and the purchase price was [POUND]97,000, the
maximum the Seller would lend is [POUND]94,090. In the case of loans
secured against new build properties, lending is based on a maximum of
97% of value provided that this does not exceed 100% of the purchase
price. So, if the value of a new build property was [POUND]100,000 and
the purchase price was [POUND]97,000, the maximum that the Seller
would lend is [POUND]97,000.
5. Mortgage Indemnity Guarantee Policies/High LTV Fees
Borrowers are currently required to pay high LTV fees to the Seller
for each Mortgage account where the aggregate of the outstanding
principal balance of the relevant Loan(s) at origination (excluding
any capitalised high LTV fees and/or booking fees and/or valuation
fees) exceeds certain specified percentages.
If the LTV ratio exceeds 90%, the Borrower pays high LTV fees based on
the difference between the actual LTV ratio and a 75% LTV ratio.
Prior to 1 January 2001, the Seller required cover under mortgage
indemnity guarantee, or MIG, policies for Mortgages where the LTV
ratio exceeded 75%, though during 1999 and 2000 the Seller paid the
premium for the MIG cover if the LTV ratio was between 75% and 90%.
Since 1 January 2001, the Seller has not required cover under MIG
policies for any Loans.
6. Status of Applicant(s)
The maximum amount of the aggregate Loan(s) under a mortgage account
is determined by the application of an affordability model. This model
delivers an individualised result that reflects the applicant's net
income, existing credit commitments and burden of family expenditure.
The model also calculates the full debt servicing cost at a stressed
rate of interest before comparing this cost to the net disposable
income that the applicant has available. The credit score also
influences the decision of how much to lend using the principle that
high credit scores infer a proven ability to manage financial affairs.
The Seller maintains rules on the amount of variable income (overtime,
bonus, commission) that it will allow into the model and as a general
rule will allow no more than 60% of these items. Benefit payments are
allowed (including tax credits) as these quite often compensate for
the taxation and National Insurance deductions that would normally
cause lower levels of income to fall below the minimum wage levels.
This model returns "answers" of zero up to
38
amounts that would equate to over five times income. Regardless, the
Seller maintains a policy rule that it will not lend more than an
amount equal to five times income.
In cases where a single Borrower is attempting to have the Seller take
a secondary income into account, the Seller will consider the
sustainability of the Borrower's work hours, the similarity of the
jobs and/or skills, the commuting time and distance between the jobs,
the length of employment at both positions and whether the salary is
consistent with the type of employment. The Seller will determine,
after assessing the above factors, if it is appropriate to use both
incomes. If so, both incomes will be used as part of the normal income
calculation.
When there are two applicants, the Seller adds joint incomes together
for the purpose of calculating the applicant's total income. The
Seller may, at its discretion, consider the income of one additional
applicant as well but only a maximum rate of one times that income.
Positive proof of the borrower's identity and address must be
established. In exceptional circumstances this requirement can be
waived (provided money laundering regulations are complied with), but
the reasons for doing so must be fully documented.
The Seller may exercise discretion within its lending criteria in
applying those factors which are used to determine the maximum amount
of the Loan(s). Accordingly, these parameters may vary for some Loans.
The Seller may take the following into account when exercising
discretion: credit score result, existing customer relationship,
percentage of LTV, stability of employment and career progression,
availability of living allowances and/or mortgage subsidy from the
employer, employer's standing, regularity of overtime, bonus or
commission (up to a maximum of 60% of the income), credit commitments,
quality of security (such as type of property, repairs, location or
saleability), and the increase in income needed to support the Loan.
The Seller may not exercise discretion where it is lending over 95% of
value or the Borrower's credit score fails. There is an exception from
this policy for existing Borrowers who are moving home and the
Seller's overall position is improved.
7. Credit History
7.1 Credit Search
A credit search is carried out in respect of all applicants.
Applications may be declined where an adverse credit history (for
example, county court judgment (or the Scottish equivalent), default,
or bankruptcy notice) is revealed or the score does not meet the
required risk/reward trade-off.
7.2 Bank Reference
A bank reference may be sought or the applicants may be required to
provide bank statements in support of his or her application.
8. Scorecard
The Seller uses some of the above criteria and various other criteria
to provide an overall score for the application that reflects a
statistical analysis of the risk of advancing the Loan. The lending
policies and processes are determined centrally to ensure consistency
in the management and monitoring of credit risk exposure. Full use is
made of software technology in credit scoring new applications. Credit
scoring applies statistical analysis to publicly available data and
customer-provided data to assess the likelihood of an account going
into arrears.
39
The Seller reserves the right to decline an application that has
received a passing score. The Seller does have an appeals process if
an applicant believes his or her application to be unfairly denied. It
is the Seller's policy to allow only authorised individuals to
exercise discretion in granting variances from the scorecard.
40
SCHEDULE 5
POWER OF ATTORNEY IN FAVOUR OF FUNDING 1, FUNDING 2, THE MORTGAGES
TRUSTEE, THE FUNDING 1 SECURITY TRUSTEE AND THE FUNDING 2 SECURITY
TRUSTEE
THIS DEED OF POWER OF ATTORNEY is made on the [*] by:
(1) BANK OF SCOTLAND PLC a public limited company incorporated under the
laws of Scotland, whose registered office is at Xxx Xxxxx, Xxxxxxxxx,
XX0 0XX (registered number SC 327000) (the SELLER);
IN FAVOUR OF each of:
(2) PERMANENT FUNDING (NO. 1) LIMITED whose registered office is at 00
Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (registered number 4267660)
(FUNDING 1);
(3) PERMANENT FUNDING (NO. 2) LIMITED whose registered office is at 00
Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (registered number 04441772)
(FUNDING 2);
(4) PERMANENT MORTGAGES TRUSTEE LIMITED whose registered office is at 00
Xxxxxxxxx, Xx Xxxxxx, Xxxxxx XX0 0XX (registered number 83116) (the
MORTGAGES TRUSTEE);
(5) THE BANK OF NEW YORK, a New York banking corporation, acting through
its offices at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX in its
capacity as security trustee under the Funding 1 Deed of Charge and
the Funding 2 Deed of Charge (the FUNDING 1 SECURITY TRUSTEE and the
FUNDING 2 SECURITY TRUSTEE (respectively), which expressions shall
include such company and all other persons or companies for the time
being acting as the security trustee or security trustees under the
Funding 1 Deed of Charge and the Funding 2 Deed of Charge
(respectively)).
WHEREAS:
(A) By virtue of a mortgage sale agreement (the MORTGAGE SALE AGREEMENT)
dated 14 June 2002 and as subsequently amended and restated on 6 March
2003, 25 November 2003, 12 March 2004, 22 July 2004, 18 November 2004,
23 March 2005, 22 June 2005, 22 March 2006, 17 October 2006 and [*]
October 2007 and made between the Seller (1) Funding 1 (2) Funding 2
(3) the Mortgages Trustee (4) the Funding 1 Security Trustee and (5)
the Funding 2 Security Trustee provision was made for the execution by
the Seller of this Power of Attorney.
(B) Words and phrases in this Power of Attorney shall (save where
expressed to the contrary) have the same meanings respectively as the
words and phrases in the Master Definitions and Construction Schedule
dated [*] October 2007 as amended, varied or supplemented from time to
time and signed by amongst others, the parties to the Power of
Attorney.
NOW THIS DEED WITNESSETH as follows:
1. The Seller irrevocably and by way of security for the performance of
the covenants, conditions and undertakings on the part of the Seller
contained in the Mortgage Sale Agreement and the Servicing Agreement
HEREBY APPOINTS each of Funding 1, Funding 2, the Mortgages Trustee,
the Funding 1 Security Trustee and the Funding 2 Security Trustee and
any receiver and/or administrator appointed from time to time in
respect of Funding 1 and/or Funding 2 and/or the Mortgages Trustee or
their assets (each an ATTORNEY) severally to be its true and lawful
attorney for the Seller and
41
in the Seller's name or otherwise to do any act matter or thing which
any Attorney considers necessary or desirable for the protection,
preservation or enjoyment of that Attorney's interest in the Loans and
their Related Security and/or which ought to be done under the
covenants, undertakings and provisions contained in the Mortgage Sale
Agreement including (without limitation) any or all of the following:
(a) to execute, sign, seal and deliver (using the company seal of
the Seller where appropriate) any conveyance, assignation or
transfer (including, for the avoidance of doubt any Scottish
Declaration of Trust) of the Loans or any of them to the
Mortgages Trustee and its successors in title or to any other
person or persons entitled to the benefit thereof;
(b) to execute, sign, seal and deliver (using the company seal of
the Seller where appropriate) any conveyance, assignment,
assignation or transfer (including for the avoidance of doubt,
each Scottish Declaration of Trust) of the Related Security or
any item comprised therein (to the extent only that such item
or items relate to the Loans) to the Mortgages Trustee and its
successors in title or to any other person or persons entitled
to the benefit thereof or entitled to be registered at the
Land Registry as proprietor thereof or to be registered in the
Land Register of Scotland or recorded in the General Register
of Sasines as heritable creditor thereof (as the case may be);
(c) to do every other act or thing which the Seller is obliged to
do under the Mortgage Sale Agreement or which that Attorney
may otherwise consider to be necessary proper or expedient for
fully and effectually vesting or transferring the interests
sold thereunder in the Loans and their Related Security or any
or each of them and/or the Seller's estate right and title
therein or thereto in or to the Mortgages Trustee and its
successors in title or to any other person or persons entitled
to the benefit thereof (as the case may be) in the same manner
and as fully and effectually in all respects as the Seller
could have done including, without limitation, any of the acts
referred to in clause 6.5(a) to (c) of the Mortgage Sale
Agreement;
(d) to exercise its rights, powers and discretions under the Loans
including the right to fix the rate or rates of interest
payable under the Loans in accordance with the terms thereof
including, for the avoidance of doubt, whilst such Loans
subsist and subject to the consent of the Mortgages Trustee
being given to the setting of such rates, setting the Seller's
Variable Base Rate in the circumstances referred to in clause
4.4 of the Servicing Agreement and/or following perfection
pursuant to clause 6.1 of the Mortgages Sale Agreement
PROVIDED THAT nothing in the Clause shall prevent the Seller
(or any of its attorneys from time to time) from setting a
higher rate than those set or to be set or required or to be
required by the Mortgages Trustee or Funding 1 or Funding 2
under this Power of Attorney;
(e) to discharge the Mortgages or any of them and to sign, seal,
deliver and execute such receipts, releases, surrenders,
instruments, discharges, retrocessions and deeds as may be
requisite or advisable in order to discharge the relevant
Property or Properties from the Mortgages or any of them; and
(f) to exercise all the powers of the Seller in relation to such
Loans and their Related Security.
2. Each Attorney shall have the power by writing under its hand by an
officer of the Attorney from time to time to appoint a substitute who
shall have power to act on behalf of the Seller as if that substitute
shall have been originally appointed Attorney by this Power of
Attorney (including, without limitation, the power of further
substitution) and/or to revoke any such appointment at any time
without assigning any reason therefor.
42
3. The Seller hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorneys shall lawfully do or
cause to be done in and concerning the Loans or their Related Security
by virtue of this Power of Attorney.
4. The laws of England shall apply to this Power of Attorney and the
interpretation thereof.
IN WITNESS WHEREOF the Seller has executed and delivered this document as a
deed the day and year first before written.
THE COMMON SEAL of )
BANK OF SCOTLAND PLC )
was hereunto affixed in )
the presence of: )
Authorised Signatory
Authorised Signatory
43
SCHEDULE 6
LOAN REPURCHASE NOTICE
Dated [ ]
1. It is hereby agreed that for the purpose of this notice the PRINCIPAL
AGREEMENT shall mean the Mortgage Sale Agreement dated 14 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004,
22 July 2004, 18 November 2004, 23 March 2005, 22 June 2005 and 22
March 2006 and as further amended and restated on 17 October 2006 and
[*] October 2007 and from time to time, made between (1) BANK OF
SCOTLAND PLC (the SELLER) (2) PERMANENT FUNDING (NO. 1) LIMITED (3)
PERMANENT FUNDING (NO. 2) LIMITED (4) PERMANENT MORTGAGES TRUSTEE
LIMITED (the MORTGAGES TRUSTEE), (5) THE BANK OF NEW YORK (as FUNDING
1 SECURITY TRUSTEE) and (6) THE BANK OF NEW YORK (as FUNDING 2
SECURITY TRUSTEE) (as the same may be or have been amended, varied or
supplemented from time to time with the consent of those parties).
2. Save where the context otherwise requires, words and expressions in
this notice shall have the same meanings respectively as when used in
the Principal Agreement.
3. In accordance with clause 8.5 of the Principal Agreement, upon receipt
of this Loan Repurchase Notice by the Seller there shall exist between
the Seller and the Mortgages Trustee an agreement (the AGREEMENT FOR
SALE) for the sale by the Mortgages Trustee to the Seller of the Loans
and their Related Security more particularly described in the Schedule
hereto. Completion of such sale shall take place on [ ].
4. The Agreement for Sale shall incorporate, mutatis mutandis, the
relevant provisions of the Principal Agreement.
____________________________
Signed for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED
[On duplicate
We hereby acknowledge receipt of and confirm the contents of the Loan
Repurchase Notice dated [ ].
____________________________
Signed for and on behalf of
BANK OF SCOTLAND PLC]
44
SCHEDULE
1 2 3 4 5
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
45
SCHEDULE 7
ASSIGNMENT OF THIRD PARTY RIGHTS
THIS DEED OF ASSIGNMENT is made on [*]
BY:
(1) BANK OF SCOTLAND PLC (registered number SC 327000), a public limited
company incorporated under the laws of Scotland, whose registered
office is at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX (the TRANSFEROR);
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel
Islands, whose registered office is at 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx
XX0 0XX (the TRANSFEREE).
WHEREAS:
(A) By the charges by way of legal mortgage or standard security (the
MORTGAGES) brief particulars of which are set out in the Annexure
hereto the properties brief particulars of which are similarly set out
became security for the repayment of the moneys therein mentioned.
(B) By the Mortgage Sale Agreement, the Transferor agreed to sell and the
Transferee agreed to buy all right, title, interest and benefit (both
present and future) of the Transferor in and under those Mortgages and
all their Related Security and all monies secured by those Mortgages
and Related Security.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
master definitions and construction schedule dated [*] October 2007 as
amended and/or restated from time to time, signed by, amongst others,
the parties to this Deed (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) and this Deed
shall be construed in accordance with the interpretation provisions
set out in Clause 2 thereof.
2. The Transferor hereby assigns absolutely unto the Transferee with full
title guarantee or, in the case of any Related Security or rights of
action (as described in Clause (b) below) governed by Scots law, with
absolute warrandice:
(a) the benefit of all Related Security relating to the Mortgages
(including without limitation all securities for the principal
moneys and interest secured by the Mortgages and the benefit
of all consents to mortgage signed by occupiers of the
mortgaged properties and MHA Documentation and the benefit of
all guarantees, indemnities and surety contracts relating to
the Mortgages) other than any such Related Security which has
been transferred to the Transferee by other means or which is
not otherwise capable of such transfer; and
46
(b) all causes and rights of action of the Transferor against any
person in connection with any report, valuation, opinion,
certificate, consent or other statement of fact or opinion
given in connection with any Related Security relating to the
Mortgages or affecting the decision to make any advance in
connection with such Mortgages.
3. The Transferor on behalf of the Transferee agrees to intimate the
assignation contained in Clause 2 hereof to all relevant third parties
where required to do so pursuant to clause 6 of the Mortgage Sale
Agreement or as otherwise required by the Funding 1 Security Trustee
or the Funding 2 Security Trustee.
4. This Deed shall be governed by and construed in accordance with
English law.
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
BANK OF SCOTLAND PLC )
acting by its attorney in )
the presence of: ) _______________
Witness's Signature: ______________
Name: ______________
Address: ______________
47
ANNEXURE REFERRED TO IN THE FOREGOING ASSIGNMENT
Account No. Property address Borrower Date of Mortgage
48
SCHEDULE 8
ASSIGNMENT OF HALIFAX MORTGAGE RE LIMITED MIG POLICIES
THIS DEED is made on [*]
BY:
(1) BANK OF SCOTLAND PLC (registered number SC 327000), a public limited
company incorporated under the laws of Scotland, whose registered
office is at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX (the SELLER);
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel
Islands, whose registered office is at 00 Xxxxxxxxx, Xx Xxxxxx,
Xxxxxx, XX0 0XX (the MORTGAGES TRUSTEE).
WHEREAS:
(A) By a Mortgage Sale Agreement dated 14 June 2002, as amended and
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July
2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and
17 October 2006 and as further amended and restated on [*] October
2007 and from time to time made between, amongst others, the parties
hereto, the Seller agreed to transfer to the Mortgages Trustee certain
charges by way of legal mortgage or standard security secured on
residential property in England, Wales and Scotland together with the
benefit of any monies secured thereby from time to time.
(B) The Seller has the benefit of mortgage indemnity insurance policies
brief details of which are set out in the Schedule to this Deed (the
HMRL MIG POLICIES).
(C) The Seller has agreed with the Mortgages Trustee to assign to the
Mortgages Trustee the benefit of the HMRL MIG Policies to the extent
that they relate to the Loans in the Portfolio.
(D) The insurance businesses (including, for the avoidance of doubt, the
HMRL MIG Policies) of Halifax Mortgage Re Limited were acquired by
HBOS Insurance (PCC) Guernsey Limited on 21 December 2001.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
master definitions and construction schedule dated [*] October 2007 as
amended and/or restated from time to time, signed by amongst others,
the parties to this Deed, (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 CONSTRUCTION SCHEDULE) and this Deed
shall be construed in accordance with the interpretation provisions
set out in Clause 2 thereof.
2. The Seller with full title guarantee hereby conveys, transfers and
assigns to the Mortgages Trustee absolutely all its right, title,
interest and benefit in the HMRL MIG Policies to the extent that they
relate to the Mortgages which as at this date are comprised in the
Portfolio, and all moneys and proceeds to become payable under any of
the same and all covenants relating thereto and all powers and
remedies for enforcing the same.
49
3. This Deed shall be governed by and construed in accordance with
English law.
IN WITNESS WHEREOF this document has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by )
BANK OF SCOTLAND PLC )
acting by its attorney in )
the presence of: ) ____________________
Witness's Signature: _____________________
Name: _____________________
Address: _____________________
50
SCHEDULE 1
[Mortgage indemnity guarantee policies numbered 227001, 227001(A), 227002,
227003 and 227006 respectively issued to the Seller by Halifax Mortgage Re
Limited.]
51
SCHEDULE 2
1 2 3 4 5
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
52
SCHEDULE 9
HALIFAX MORTGAGE RE LIMITED MIG POLICIES ASSIGNMENT NOTICE
To: HBOS Insurance (PCC) Guernsey Ltd
c/o AON Insurance Managers (Guernsey) Limited
(as Managers of HBOS Insurance (PCC) Ltd)
XX Xxx 00
Maison Trinity
Xxxxxxx Xxxxxx
Xx Xxxxx Xxxx
Xxxxxxxx XX0 0XX
[*]
Dear Sirs,
RE: [ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED 227001,
227001(A), 227002, 227003 AND 227006 RESPECTIVELY (THE MIG POLICIES)]
We hereby give you notice that, by an Assignment dated [*] and made between
ourselves and Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE) (a
copy of which is attached to this notice), we assigned all of our right, title,
benefit and interest in the MIG Policies to the Mortgages Trustee (to the
extent that they relate to the loans and the mortgages in a portfolio referred
to in [the Mortgage Sale Agreement dated 14 June 2002 as amended and/or
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004, 18
November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and 17 October 2006
and as further amended and restated on [*] October 2007 between ourselves,
Permanent Funding (No. 1) Limited, Permanent Funding (No. 2) Limited, the
Mortgages Trustee, The Bank of New York (as FUNDING 1 SECURITY TRUSTEE) and The
Bank of New York (as FUNDING 2 SECURITY TRUSTEE)/the New Portfolio Notice dated
[*] between ourselves, Permanent Funding (No.1) Limited, Permanent Funding (No.
2) Limited and the Mortgages Trustee)]1.
Yours faithfully,
_______________
For and on behalf of
BANK OF SCOTLAND PLC
Copy: Permanent Mortgages Trustee Limited
Permanent Funding (No. 1) Limited
Permanent Funding (No. 2) Limited
The Bank of New York
1 Delete as applicable.
53
SCHEDULE 10
INSURANCE ENDORSEMENT
ON THE HEADED NOTEPAPER OF [THE RELEVANT INSURER ]
ENDORSEMENT [X] attaching to, supplemental to and forming part of policy number
[policy number] (the POLICY) issued by [name of Insurer] (the INSURER).
Expressions defined in the Policy shall unless indicated otherwise, have the
same meanings in this endorsement.
It is hereby noted and agreed that with effect from the date of this
Endorsement:
1. The definition of INSURED shall be deleted in its entirety and
replaced with the following wording:
(a) "Bank of Scotland plc (BANK OF SCOTLAND) whose registered
office is at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX, XX0 0XX;
(b) any assignee or person to whom Bank of Scotland has assigned
(whether legally or equitably and whether by way of security
or otherwise) or has declared a trust in respect of any loans
and/or mortgages and/or standard securities and related
collateral and/or assets to which this Policy relates (an
ASSIGNEE) (whether or not any such Assignee holds the same on
trust for another or others); and
(c) any person benefiting from security granted by Bank of
Scotland or its Assignee over any loans and/or mortgages
and/or standard securities and related collateral and/or
assets to which this Policy relates in connection with the
financing or re-financing of such loans and/or mortgages
and/or standard securities and related collateral and/or
assets."
2. Each term of the Policy which is inconsistent with the intent and/or
effect of the amended definition of INSURED contemplated in paragraph
1 above (the NEW DEFINITION) shall be subject to the New Definition
and shall not apply to the extent that such term of the Policy is
inconsistent with the New Definition.
3. This endorsement does not have, nor is intended by the parties to
have, the effect of conferring on the Insurer any greater liabilities
under the Policy than those of the Insurer immediately prior to this
endorsement being entered into between parties to this endorsement.
4. The Insurer acknowledges and agrees that any Insured under the Policy
may from time to time appoint Halifax or any other person as agent of
that Insured to deal with the Insurer on its behalf in the
administration of and making and payment of claims under the Policy.
All other terms, clauses and conditions of the Policy remain unchanged.
This Endorsement is signed for and on behalf of the Insurer by a duly
authorised signatory:
_____________________
[Name]
[Position]
[Insurer]
Dated[*]
54
SCHEDULE 11
INSURANCE ACKNOWLEDGEMENTS
PART 1
ON THE HEADED NOTEPAPER OF GE MORTGAGE INSURANCE LIMITED
To: Bank of Scotland plc (the SELLER)
Xxx Xxxxx
Xxxxxxxxx
XX0 0XX
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
00 Xxxxxxxxx
Xx Xxxxxx
Xxxxxx
XX0 00X
Channel Islands
Permanent Funding (No. 1) Limited (FUNDING 1)
00 Xxxxx Xx Xxxxx'x
Xxxxxx XX0X 0XX
Permanent Funding (No. 2) Limited (FUNDING 2)
00 Xxxxx Xx Xxxxx'x
Xxxxxx XX0X 0XX
The Bank of New York (the Funding 1 Security Trustee and the Funding 2
Security Trustee)
Xxx Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
[date]
Dear Sirs,
[MORTGAGE INDEMNITY GUARANTY POLICIES NUMBERS 227001, 227001(A), 227002, 227003
AND 227006 (THE MIG POLICIES)]
We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:
(a) the Seller may assign or agree to transfer or declare a trust in
respect of its interest in properties which are (or may from time to
time be) covered by the MIG Policies to the Mortgages Trustee;
(b) the Mortgages Trustee may declare a trust over its interest in such
properties in favour of Funding 1, Funding 2 and the Seller; and
(c) Funding 1 and Funding 2 may charge their respective interests in such
properties to the Funding 1 Security Trustee (in the case of Funding
1) and the Funding 2 Security Trustee (in the case of Funding 2).
55
In consideration of the payment of [POUND]1 made by each of the Seller, the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (receipt whereof is hereby acknowledged), we hereby
confirm that the arrangements set out in paragraphs (a) to (c) inclusive above
will not cause the MIG Policies to lapse or terminate and, notwithstanding any
such arrangements, we will continue to pay claims under the MIG Policies in the
same way and in the same amount as we would have paid them, had the said
arrangements not been entered into.
Yours faithfully,
FOR AND ON BEHALF OF GE MORTGAGE INSURANCE LIMITED
56
PART 2
ON THE HEADED NOTEPAPER OF HBOS INSURANCE (PCC) GUERNSEY LTD
To: Bank of Scotland plc (the SELLER)
Xxx Xxxxx
Xxxxxxxxx
XX0 0XX
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
00 Xxxxxxxxx
Xx Xxxxxx
Xxxxxx
XX0 00X
Channel Islands
Permanent Funding (No. 1) Limited (FUNDING 1)
00 Xxxxx Xx. Xxxxx'x
Xxxxxx
XX0X 0XX
Permanent Funding (No. 2) Limited (FUNDING 2)
00 Xxxxx Xx. Xxxxx'x
Xxxxxx
XX0X 0XX
The Bank of New York (the FUNDING 1 SECURITY TRUSTEE and the FUNDING 2
SECURITY TRUSTEE)
00xx Xxxxx
Xxx Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
[*]
Dear Sirs,
[MORTGAGE INDEMNITY GUARANTEE POLICY NUMBERS 227001, 227001(A), 227002, 227003
AND 227006 (the MIG POLICIES)]
We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:
(a) all of the Seller's right, title, benefit and interest in the MIG
Policies (to the extent that the same relate to the mortgage loans and
their collateral security sold or to be sold by the Seller to the
Mortgages Trustee pursuant to a mortgage sale agreement to be entered
into between each of the parties to whom this letter is addressed)
shall be assigned by the Seller to the Mortgages Trustee;
(b) the Seller may sell and assign or agree to sell and assign or declare
a trust in respect of its interest in properties which are (or may
from time to time be) covered by the MIG Policies to or in favour of
the Mortgages Trustee;
57
(c) the Mortgages Trustee may declare a trust over its interest in such
properties in favour of Funding 1, Funding 2 and the Seller; and
(d) Funding 1 and/or Funding 2 may charge their respective beneficial
interests in such properties to the Funding 1 Security Trustee (in the
case of Funding 1) and the Funding 2 Security Trustee (in the case of
Funding 2).
In consideration of the payment of [POUND]1 made by each of the Seller, the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (receipt whereof is hereby acknowledged), we hereby
confirm that the arrangements set out in paragraphs (a) to (d) inclusive above
will not cause the MIG Policies to lapse or terminate and, notwithstanding any
such arrangements, we will continue to pay claims under the MIG Policies in the
same way and in the same amount as we would have paid them, had the said
arrangements not been entered into.
Yours faithfully,
FOR AND ON BEHALF OF HBOS INSURANCE (PCC) GUERNSEY LIMITED
58
SCHEDULE 12
NEW PORTFOLIO NOTICE
Dated [ ]
1. It is hereby agreed for the purpose of this notice the PRINCIPAL
AGREEMENT shall mean the Mortgage Sale Agreement dated 14 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004,
22 July 2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March
2006 and as further amended and restated on 17 October 2006 and [*]
October 2007 made between (1) BANK OF SCOTLAND PLC (the SELLER) (2)
PERMANENT FUNDING (NO. 1) LIMITED (FUNDING 1) (3) PERMANENT FUNDING
(NO. 2) LIMITED (FUNDING 2) (4) PERMANENT MORTGAGES TRUSTEE LIMITED
(the MORTGAGES TRUSTEE), (5) THE BANK OF NEW YORK (as FUNDING 1
SECURITY TRUSTEE) and (6) THE BANK OF NEW YORK (as FUNDING 2 SECURITY
TRUSTEE) (as the same may be or have been amended, varied or
supplemented from time to time with the consent of those parties).
2. Save where the context otherwise requires, words and expressions in
this notice shall have the same meanings respectively as when used in
the Principal Agreement.
3. In accordance with and subject to clause 4.1 of the Principal
Agreement, upon receipt by the Seller of the duplicate of this notice
signed by Funding 1, Funding 2 and the Mortgages Trustee, there shall
exist between the Seller, Funding 1, Funding 2 and the Mortgages
Trustee an agreement (the AGREEMENT FOR SALE) for the sale by the
Seller to the Mortgages Trustee of the New Loans and their Related
Security more particularly described in the Schedule hereto (other
than any New Loans and their Related Security which have been redeemed
in full prior to the next following Sale Date). Completion of such
sale shall take place on [ ].
4. The Agreement for Sale shall incorporate, mutatis mutandis, the
relevant provisions of the Principal Agreement.
__________
Signed for and on behalf of
BANK OF SCOTLAND PLC
[On duplicate:
We hereby acknowledge receipt of the New Portfolio Notice dated [ ], and
confirm that we are prepared to purchase New Loans as set out in that notice.
__________
Signed for and on behalf of
PERMANENT FUNDING (NO. 1) LIMITED
__________
Signed for and on behalf of
59
PERMANENT FUNDING (NO. 2) LIMITED
__________
Signed for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED]
60
SCHEDULE
1 2 3 4 5
Title No. (if Borrower Property Postcode Account No. Date of Mortgage
registered)
61
SCHEDULE 13
FORMS OF SCOTTISH TRANSFER
LAND REGISTER
We, BANK OF SCOTLAND PLC, incorporated under the Companies Acts (registered
number SC 327000) and having our Registered Office at Xxx Xxxxx, Xxxxxxxxx XX0
0XX (the TRANSFEROR) CONSIDERING THAT in terms of a Mortgage Sale Agreement
among us the Transferor, PERMANENT MORTGAGES TRUSTEE LIMITED, a private limited
company incorporated under the laws of Jersey, Channel Islands (registered
number 83116) and having its registered office at 00 Xxxxxxxxx, Xx Xxxxxx,
Xxxxxx XX0 0XX (the TRANSFEREE) and others dated 14 June 2002 as amended and
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004, 18
November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and as further
amended and restated on 17 October 2006 and [*] October 2007 (the MORTGAGE SALE
AGREEMENT) we have sold our whole right, title and interest in and to the
Standard Securities and others hereinafter mentioned to the Transferee NOW
THEREFORE we, the Transferor, IN CONSIDERATION of the sums payable in terms of
and in implement of the Mortgage Sale Agreement HEREBY ASSIGN to the Transferee
as trustee under and in terms of the Mortgages Trust Deed among us, the
Transferor, the Transferee and others dated 13 June 2002 as amended and
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004, 18
November 2004, 23 March 2005, 22 March 2006, 17 October 2006 and [*] October
2007 (the MORTGAGES TRUST DEED) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:
(a) the Standard Securities granted by the respective parties whose names
are specified in Column 3 of the Schedule annexed and executed as
relative hereto in favour of us the Transferor for all sums due and to
become due, to the extent of the sums specified in the relative entry
in Column 6 of the said Schedule being the amounts now due under the
said respective Standard Securities, registered said Standard
Securities in the Land Register under the Title Number specified in
the relative entry in Column 4 of the said Schedule on the date
specified in the relative entry in Column 5 of the said Schedule; and
(b) the whole rights, title and interest of us the Transferor in and under
all and any personal bonds, credit agreements or agreements for loan
(however constituted) secured by the said Standard Securities and
granted by or entered into with the said respective parties whose
names are specified in Column 3 of the said Schedule, the dates of the
respective personal bonds, credit agreements or agreements for loan
being specified in the relative entry in Column 7 of the said
Schedule;
With interest from and also arrears and accumulations of interest due and
unpaid as at [ ]; And we grant warrandice:
IN WITNESS WHEREOF these presents typewritten on this [and the preceding] page
are together with the Schedule annexed hereto executed at [ ] on the [ ] day of
[ ] as follows:
SUBSCRIBED for and on behalf of BANK OF SCOTLAND PLC by
_______________ _______________ Authorised Signatory
(Print Full Name)
62
before this witness
_______________ Witness
_______________
(Print Full Name)
_______________
_______________
(Address)
63
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY BANK OF
SCOTLAND PLC IN FAVOUR OF PERMANENT MORTGAGES TRUSTEE LIMITED
1 2 3 4 5 6 7
Account No. Address Borrowers' Title Registration Sum Due Date of
Full Names Number Date Bond or Loan
Agreement
_______________ Authorised Signatory
64
SCHEDULE 14
FORMS OF SCOTTISH TRANSFER
SASINE REGISTER
We, BANK OF SCOTLAND PLC, incorporated under the Companies Acts (registered
number SC 327000) and having our Registered Office at Xxx Xxxxx, Xxxxxxxxx XX0
0XX (the TRANSFEROR) CONSIDERING THAT in terms of a Mortgage Sale Agreement
among us the Transferor, PERMANENT MORTGAGES TRUSTEE LIMITED, a private limited
company incorporated under the laws of Jersey, Channel Islands (registered
number 83116) and having its registered office at 00 Xxxxxxxxx, Xx Xxxxxx,
Xxxxxx XX0 0XX (the TRANSFEREE) and others dated 14 June 2002 as amended and
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004, 18
November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and as further
amended and restated on 17 October 2006 and [*] October 2007 (the MORTGAGE SALE
AGREEMENT) we have sold our whole right, title and interest in and to the
Standard Securities and others hereinafter mentioned to the Transferee NOW
THEREFORE we the Transferor IN CONSIDERATION of the sums payable in terms of
and in implement of the Mortgage Sale Agreement HEREBY ASSIGN to the Transferee
as trustee under and in terms of the Mortgages Trust Deed among us, the
Transferor, the Transferee and others dated 13 June 2002 as amended and
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004, 18
November 2004, 23 March 2005, 22 March 2006, 17 October 2006 and [*] October
2007 (the MORTGAGES TRUST DEED) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:
(a) the Standard Securities granted by the respective parties whose names
are specified in Column 3 of the Schedule annexed and executed as
relative hereto in favour of us the Transferor for all sums due and to
become due, to the extent of the sums specified in the relative entry
in Column 6 of the said Schedule being the amounts now due under the
said respective Standard Securities, recorded said Standard Securities
in the Register for the County specified in the relative entry in
Column 4 of the said Schedule on the date specified in the relative
entry in Column 5 of the said Schedule; and
(b) the whole rights, title and interest of us the Transferor in and under
all and any personal bonds, credit agreements or agreements for loan
(however constituted) secured by the said Standard Securities and
granted by or entered into with the said respective parties whose
names are specified in Column 3 of the said Schedule, the dates of the
respective personal bonds, credit agreements or agreements for loan
being specified in the relative entry in Column 7 of the said
Schedule;
With interest from and also arrears and accumulations of interest due and
unpaid as at [ ]; And we grant warrandice:
IN WITNESS WHEREOF these presents typewritten on this [and the preceding] page
are together with the Schedule annexed hereto executed at [ ] on the [ ] day of
[ ] as follows:
SUBSCRIBED for and on behalf of BANK OF SCOTLAND PLC by
_______________ _______________ Authorised Signatory
(Print Full Name)
before this witness
_______________ Witness
_______________
65
(Print Full Name)
_______________
_______________
(Address)
66
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY BANK OF
SCOTLAND PLC IN FAVOUR OF PERMANENT MORTGAGES TRUSTEE LIMITED
1 2 3 4 5 6 7
Account Address Borrowers' County Recording Sum Due Date of
No. Full Names Date Bond or Loan
Agreement
_______________ Authorised Signatory
67
SCHEDULE 15
FORM OF SCOTTISH DECLARATION OF TRUST
DECLARATION OF TRUST
among
(1) BANK OF SCOTLAND PLC, registered as a public company under the
Companies Xxx 0000 (registered number SC 327000) and having its
registered office at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX (the SELLER);
(2) PERMANENT MORTGAGES TRUSTEE LIMITED, a private limited company
incorporated under the laws of Jersey, Channel Islands (registered
number 83116), and having its registered office at 00 Xxxxxxxxx, Xx
Xxxxxx, Xxxxxx XX0 0XX, Channel Islands as trustee under and in terms
of the mortgages trust deed after mentioned (the MORTGAGES TRUSTEE);
(3) PERMANENT FUNDING (NO. 1) LIMITED, incorporated under the Companies
Acts (registered number 4267660) and having its registered office at
00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (FUNDING 1); and
(4) PERMANENT FUNDING (NO. 2) LIMITED, incorporated under the Companies
Acts (registered number 04441772) and having its registered office at
00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (FUNDING 2, and together with
Funding 1 and the Seller, each in its capacity as a beneficiary of the
Mortgages Trust, the BENEFICIARIES).
WHEREAS:
(A) Title to the Scottish Trust Property after mentioned is held by and
vested in the Seller.
(B) In terms of a Mortgages Trust Deed entered into among the Seller,
Funding 1, Funding 2 and the Mortgages Trustee dated 13 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004,
22 July 2004, 18 November 2004, 23 March 2005, 22 March 2006, 17
October 2006 and [*] October 2007 and the Mortgages Trust constituted
in terms thereof, the Mortgages Trustee holds the Trust Property on
trust for the Beneficiaries.
(C) In terms of a Mortgage Sale Agreement entered into among, inter alios,
the Seller, Funding 1, Funding 2 and the Mortgages Trustee dated 14
June 2002, as amended on 6 March 2003, 25 November 2003, 12 March
2004, 22 July 2004, 18 November 2004, 23 March 2005, 22 June 2005, 22
March 2006 and as amended and restated on 17 October 2006 and [*]
October 2007 (the MORTGAGE SALE AGREEMENT) the Seller has agreed to
sell inter alia the said Scottish Trust Property to the Mortgages
Trustee to be held thereafter by the Mortgages Trustee under and in
terms of the Mortgages Trust.
(D) In implement of clause 4.5(a)(vii) of the Mortgage Sale Agreement and
pending the taking of legal title to the said Scottish Trust Property
by the Mortgages Trustee, the Seller has undertaken to grant this
deed.
NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:
68
1. INTERPRETATION
In this deed:
(a) the amended and restated master definitions and construction
schedule signed by, amongst others, the parties to this deed
and dated 17 October 2006 (as the same may be amended, varied
or supplemented from time to time with the consent of the
parties to this 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
context otherwise requires and save where otherwise defined
herein, have the same meanings in this deed, including the
Recitals and this deed shall be construed in accordance with
the interpretation provisions set out in clause 2 of the
Master Definitions and Construction Schedule; and
(b) SCOTTISH TRUST PROPERTY shall mean the Scottish Loans and
their Related Security brief particulars of which are detailed
in the schedule annexed and executed as relative hereto (the
SCHEDULE) and any Further Advances and Home Cash Reserve
Advances made in respect of such Scottish Loans, and all
right, title, interest and benefit of the Seller to:
(i) all payments of principal and interest (including, for
the avoidance of doubt, all Accrued Interest, Arrears of
Interest, Capitalised Expenses and Capitalised Arrears)
and other sums due or to become due in respect of such
Scottish Loans and their Related Security including,
without limitation, the right to demand, xxx for,
recover and give receipts for all principal monies,
interest and costs and the right to xxx on all
covenants and undertakings made or expressed to be made
in favour of the Seller under the applicable Mortgage
Terms;
(ii) subject where applicable to the subsisting rights of
redemption of Borrowers, all MHA Documentation, Deeds of
Postponement, all third party guarantees and any other
collateral security for the repayment of the relevant
Scottish Loans;
(iii) the right to exercise all the powers of the Seller in
relation thereto;
(iv) all proceeds resulting from the enforcement of any of
such Scottish Loans and their Related Security;
(v) each Certificate of Title and Valuation Report relevant
to such Scottish Loans and any right of action of the
Seller against any solicitor, qualified conveyancer,
valuer or other person in connection with any report,
valuation, opinion, certificate or other statement of
fact or opinion given in connection with any of such
Scottish Loans and their Related Security, or any part
thereof or affecting the decision of the Seller to make
or offer to make any of such Scottish Loans or part
thereof;
(vi) the proceeds of all claims made by or on behalf of the
Seller or to which the Seller is entitled in relation
to the Scottish Properties secured by the Scottish
Mortgages detailed in the Schedule under the Buildings
Policies and the Properties in Possession Cover; and
(vii) the MIG Policies, so far as they relate to the relevant
Scottish Loans and their Related Security, including
the right to receive the proceeds of any claims.
69
2. DECLARATION OF TRUST
The Seller hereby DECLARES that from and after the date hereof the
Seller holds and, subject to Clause 8 below, shall henceforth hold the
Scottish Trust Property and its whole right, title and interest,
present and future, therein and thereto in trust absolutely for the
Mortgages Trustee and its assignees (whether absolutely or in
security) whomsoever.
3. INTIMATION
The Seller hereby intimates to the Mortgages Trustee the coming into
effect of the trust hereby declared and created and the Mortgages
Trustee by its execution of this deed immediately subsequent to the
execution hereof by the Seller acknowledges such intimation.
4. DEALINGS WITH SCOTTISH TRUST PROPERTY AND NEGATIVE PLEDGE
The Seller warrants and undertakes that:
(a) as at the date hereof it holds, subject to any pending
registration or recording in the Land Register of Scotland or
the General Register of Sasines, legal title to the Scottish
Trust Property unencumbered by any fixed or floating charge,
diligence or other Security Interest;
(b) it shall not create or agree to create any fixed or floating
charge or other Security Interest over or which may attach to
or affect the whole or any part of the Scottish Trust Property
or otherwise dispose of the same at any time when such
Scottish Trust Property or part thereof remains subject to the
trust hereby created; and
(c) it shall deal with the Scottish Trust Property (including
without prejudice to said generality the calculation and
setting of any interest rate applicable thereto) in accordance
with the provisions of the Transaction Documents and the
specific written instructions (if any) of the Mortgages
Trustee or its foresaids and shall take, subject to Clause 8
below, any such action as may be necessary (including for the
avoidance of doubt the raising or defending of any proceedings
in any court of law whether in Scotland or elsewhere) to
secure or protect the title to the Scottish Trust Property but
only in accordance with the specific written instructions (if
any) of the Mortgages Trustee or its foresaids.
5. TRANSFER OF TITLE
5.1 The Mortgages Trustee and its foresaids as beneficiary hereunder shall
have the right to call upon the Seller to execute and deliver to the
Mortgages Trustee, subject to the terms of Clause 6 of the Mortgage
Sale Agreement, valid assignations of the Scottish Trust Property or
any part thereof, and that notwithstanding the winding up of the
Seller, the making of any administration order or the filing of
documents with the court for the appointment of an administrator or
the service of a notice of intention to appoint an administrator in
respect of the Seller or the appointment of a receiver to all or any
part of the Scottish Trust Property.
5.2 The Seller undertakes to the Mortgages Trustee and binds and obliges
itself that, upon the occurrence of any one of the events specified in
Clause 6.1 of the Mortgage Sale Agreement, it will within five London
Business Days of such occurrence provide such information as is
necessary to enable the Mortgages Trustee to complete Scottish
Transfers (including all schedules and annexures thereto) in relation
to the whole of the Scottish Trust Property.
70
5.3 For further assuring the said rights and powers specified in this
Clause 5, the Seller has granted a power of attorney in favour of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee and the Funding 2 Security Trustee substantially in the form
set out in Schedule 5 to the Mortgage Sale Agreement.
6. MORTGAGES TRUSTEE DECLARATION OF TRUST
The Mortgages Trustee by its said execution of this deed hereby
DECLARES that its whole right, title and beneficial interest in and to
the Scottish Trust Property in terms of this deed are and shall be
held (to the extent not already so held) by the Mortgages Trustee and
its foresaids under and in terms of the Mortgages Trust and all sums
and amounts received or held by the Mortgages Trustee relating thereto
or deriving therefrom have been and shall be added (to the extent
aforesaid) to the Trust Property and held by the Mortgages Trustee
under the Mortgages Trust Deed.
7. MORTGAGES TRUST INTIMATION
The Mortgages Trustee hereby intimates to the Beneficiaries of the
Mortgages Trust, the declaration of trust made in terms of Clause 6
above and the Beneficiaries by executing this deed acknowledge such
intimation.
8. TERMINATION OF TRUST
If:
(a) legal title to any part or parts of the Scottish Trust
Property is taken by the Mortgages Trustee or its foresaids in
accordance with the provisions of Clause 5 above (which in the
case of any Scottish Mortgage shall be constituted by the
registration or recording of the title thereto in the Land
Register of Scotland or the General Register of Sasines (as
appropriate));
(b) any part or parts of the Scottish Trust Property forms the
subject of a repurchase in accordance with the terms of Clause
8.5 of the Mortgage Sale Agreement, or
(c) any Scottish Loan and its Related Security comprised within
the Scottish Trust Property is redeemed in full,
the trust hereby declared and created pursuant to Clauses 2 and 3
above shall (but only when any of the events or transactions before
stated has been completed irrevocably, validly and in full) ipso facto
fall and cease to be of effect in respect of such part or parts of the
Scottish Trust Property but shall continue in full force and effect in
respect of the whole remainder (if any) of the Scottish Trust
Property.
9. CHANGE OF TRUSTEE
Except with the prior consent of the Mortgages Trustee and (for so
long as each retains any right or interest in the Scottish Trust
Property) Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee, the Seller shall not be entitled to resign
office as a trustee or assume a new trustee or trustees under this
deed.
10. VARIATION
This deed and the trusts hereby declared and created pursuant to
Clauses 2 and 3 and Clauses 6 and 7 above shall not be varied in any
respect without the consent in writing of the Mortgages Trustee and
(for so long as each retains any right or interest in the Scottish
Trust Property) Funding 1, Funding 2, the Funding 1 Security Trustee
and the Funding 2 Security Trustee.
71
11. GOVERNING LAW
This deed shall be governed by and construed in accordance with the
law of Scotland and each of the parties hereby prorogates the
non-exclusive jurisdiction of the Scottish courts so far as not
already subject thereto and waives any right or plea of forum non
conveniens in respect of such jurisdiction.
12. REGISTRATION
The parties hereto consent to the registration of these presents for
preservation.
IN WITNESS WHEREOF these presents typewritten on this and the preceding [ ]
pages together with the Schedule annexed hereto are executed for and on behalf
of the Seller, the Mortgages Trustee, Funding 1 and Funding 2 at [ ] on [ ] as
follows:
SUBSCRIBED for and on behalf of BANK OF
SCOTLAND PLC by [ ], its
Attorney, at London on [ ] before this
witness:
.............................. Witness ................ Attorney
(Signature) (Signature)
.................
(Print Full Name)
.................
(Address)
72
SUBSCRIBED for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED by [ ],
one of its Directors, at London on [ ]
before this witness:
.............................. Witness ................ Attorney
(Signature) (Signature)
.................
(Print Full Name)
.................
(Address)
SUBSCRIBED for an on behalf of
PERMANENT FUNDING (NO. 1) LIMITED by [ ], one
of its Directors, at London on [ ] before
this witness:
.............................. Witness ................ Attorney
(Signature) (Signature)
.................
(Print Full Name)
.................
(Address)
SUBSCRIBED for an on behalf of
PERMANENT FUNDING (NO. 2) LIMITED by [ ], one
of its Directors, at London on [ ] before
this witness:
.............................. Witness ................ Attorney
(Signature) (Signature)
.................
(Print Full Name)
.................
(Address)
73
THIS [PAGE] [AND THE FOLLOWING PAGES] COMPRISE[S]] THE SCHEDULE REFERRED
TO IN THE FOREGOING DECLARATION OF TRUST AMONG BANK OF SCOTLAND PLC, PERMANENT
MORTGAGES TRUSTEE LIMITED, PERMANENT FUNDING (NO. 1) LIMITED AND
PERMANENT FUNDING (NO. 2) LIMITED
DETAILS OF SCOTTISH LOANS AND RELATED SECURITY
1. 2. 3. 4. 5. 6. 7.
Account Address Borrowers' Title Registration/ Sum Due Date of Loan
No. full names Number/ Recording Agreement
County Date
_______________ Attorney
Bank of Scotland plc
_______________ Director
Permanent Mortgages Trustee Limited
_______________ Director
Permanent Funding (No.1) Limited
_______________ Director
Permanent Funding (No.2) Limited
74
SCHEDULE 16
FORM OF MEMORANDUM OF RELEASE
Permanent Mortgages Trustee Limited
00 Xxxxxxxxx
Xx Xxxxxx
Xxxxxx
XX0 0XX
Channel Islands
[*]
Bank of Scotland Plc
Xxx Xxxxx
Xxxxxxxxx
XX0 0XX
Attn: Head of Mortgage Securitisation
Dear Sirs,
Pursuant to clause 8.6 of the Mortgage Sale Agreement, we hereby acknowledge:
(a) that the loans detailed in the Annexure to the attached Assignment of
Third Party Rights are released from the security created by the
Funding 1 Deed of Charge, the Second Supplemental Funding 1 Deed of
Charge [list any other supplement to the Funding 1 Deed of Charge],
the Funding 2 Deed of Charge [and list any other supplement to the
Funding 2 Deed of Charge]; and
(b) that all further monies due and received on the loans are now for the
account of Halifax.
Terms used (but not defined) herein shall have the meanings given to them in
the Master Definitions and Construction Schedule dated [*] October 2007 signed
by, amongst others, Permanent Mortgages Trustee Limited and Bank of Scotland
plc.
Yours faithfully
................
For and on behalf of
Permanent Mortgages Trustee Limited
75
SCHEDULE 17
RE-ASSIGNMENT OF MIG POLICIES
THIS DEED is made on [*]
BY:
(1) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel
Islands, whose registered office is at 00 Xxxxxxxxx, Xx Xxxxxx,
Xxxxxx, XX0 0XX (the MORTGAGES TRUSTEE);
IN FAVOUR OF:
(2) BANK OF SCOTLAND PLC (registered number SC327000), a public limited
company incorporated under the laws of Scotland, whose registered
office is at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX (the SELLER).
WHEREAS:
(A) By the Mortgage Sale Agreement dated 14 June 2002, as amended and
re-stated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July
2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and
17 October 2006 and as further amended and restated on and [*] October
2006 made between, amongst others, the parties hereto, the Seller
agreed to transfer to the Mortgages Trustee certain charges by way of
legal mortgage or standard security secured on residential property in
England, Wales and Scotland together with the benefit of any monies
secured thereby.
(B) By the Mortgage Sale Agreement, the Mortgages Trustee has agreed to
re-transfer to the Seller the Mortgages listed in Schedule 2 to this
Deed and to re-assign to the Seller the benefit of the mortgage
indemnity insurance policies brief details of which are set out in
Schedule 1 to this Deed (the HMRL MIG POLICIES) to the extent that
they relate to the Mortgages listed in Schedule 2 to this Deed.
(C) The insurance businesses (including, for the avoidance of doubt, the
HMRL MIG Policies) of Halifax Mortgage Re Limited were acquired by
HBOS Insurance (PCC) Guernsey Limited on 21 December 2001.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
amended and restated master definitions and construction schedule
dated [*] October 2007, signed by amongst others, the parties to this
Deed, (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) and this Deed shall be
construed in accordance with the interpretation provisions set out in
Clause 2 thereof.
2. The Mortgages Trustee with full title guarantee hereby conveys,
transfers and assigns to the Seller absolutely all its right, title,
interest and benefit in the HMRL MIG Policies to the extent that they
relate to the Mortgages which are listed in Schedule 2 to this Deed,
and all moneys and proceeds to become payable under any of the same
and all covenants relating thereto and all powers and remedies for
enforcing the same.
76
3. This Deed shall be governed by and construed in accordance with
English law.
IN WITNESS WHEREOF which this document has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED acting by )
its attorney in the presence of: )
Witness:
Name:
Address:
77
SCHEDULE 1
[Mortgage indemnity guarantee policies numbered 227001, 227001(A), 227002,
227003 and 227006 respectively issued to the Seller by Halifax Mortgage Re
Limited.]
78
SCHEDULE 2
1. 2. 3. 4. 5.
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
79
SCHEDULE 18
HALIFAX MORTGAGE RE LIMITED MIG POLICIES RE-ASSIGNMENT NOTICE
To: HBOS Insurance (PCC) Guernsey Ltd
c/o AON Insurance Managers (Guernsey) Limited
(as Managers of HBOS Insurance (PCC) Ltd)
XX Xxx 00
Maison Trinity
Xxxxxxx Xxxxxx
Xx Xxxxx Xxxx
Xxxxxxxx XX0 0XX
[*]
Dear Sirs,
RE: [ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED 227001,
227001(A), 227002, 227003 AND 227006 RESPECTIVELY (the MIG POLICIES)]
We hereby give you notice that, by an Assignment dated [*] and made between
ourselves and Bank of Scotland plc (the ASSIGNMENT), a copy of which is
attached to this notice, we assigned all of our right, title, benefit and
interest in the MIG Policies to Bank of Scotland plc (to the extent that they
relate to the loans and the mortgages listed in Schedule 2 to the Assignment).
Yours faithfully,
...............
For and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED
Copy: Bank of Scotland plc
Permanent Funding (No. 1) Limited
Permanent Funding (No. 2) Limited
The Bank of New York
80
SCHEDULE 19
RE-ASSIGNMENT OF THIRD PARTY RIGHTS
THIS DEED OF ASSIGNMENT is made on [*]
BY:
(1) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel
Islands, whose registered office is at 00 Xxxxxxxxx, Xx Xxxxxx, Xxxxxx
XX0 0XX (the TRANSFEROR);
IN FAVOUR OF:
(2) BANK OF SCOTLAND PLC (registered number SC327000), a public limited
company incorporated under the laws of Scotland, whose registered
office is at Xxx Xxxxx, Xxxxxxxxx XX0 0XX (the TRANSFEREE).
WHEREAS:
(A) By the charges by way of legal mortgage or standard security (the
MORTGAGES) brief particulars of which are set out in the Annexure
hereto the properties brief particulars of which are similarly set out
became security for the repayment of the moneys therein mentioned.
(B) By the Mortgage Sale Agreement, the Transferee sold and the Transferor
purchased all right, title, interest and benefit of the Transferee in
and under the Mortgages and all their Related Security and all monies
secured by those Mortgages on or about [*].
(C) By clause 8.5 of the Mortgage Sale Agreement, the Transferor has now
agreed to sell and the Transferee has agreed to repurchase all right,
title, interest and benefit (both present and future) of the
Transferor in and under the Mortgages and all their Related Security
and all monies secured by those Mortgages and Related Security.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
amended and restated master definitions and construction schedule
dated [*] October 2007 signed by, amongst others, the parties to this
Deed (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) and this Deed shall be
construed in accordance with the interpretation provisions set out in
Clause 2 thereof.
2. The Transferor hereby assigns absolutely unto the Transferee with full
title guarantee or, in the case of any Related Security or rights of
action (as described in Clause 2(b) below) governed by Scots Law, with
absolute warrandice:
81
(a) the benefit of all Related Security relating to the Mortgages
(including without limitation all securities for the principal
moneys and interest secured by the Mortgages and the benefit
of all consents to mortgage signed by occupiers of the
mortgaged properties and MHA Documentation and the benefit of
all guarantees, indemnities and surety contracts relating to
the Mortgages) other than any such Related Security which has
been transferred to the Transferee by other means or which is
not otherwise capable of such transfer; and
(b) all causes and rights of action of the Transferor against any
person in connection with any report, valuation, opinion,
certificate, consent or other statement of fact or opinion
given in connection with any Related Security relating to the
Mortgages or affecting the decision to make any advance in
connection with such Mortgages.
3. This Deed shall be governed by and construed in accordance with
English law (provided that any terms of the Deed which are particular
to Scots law shall be construed in accordance with the laws of
Scotland).
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED )
acting by its attorney in )
the presence of: )
Witness's signature:
Name:
Address:
82
SIGNATORIES
SELLER
EXECUTED as a DEED by )
BANK OF SCOTLAND PLC acting by its attorney in the presence of )
Witness's Signature:
Name:
Address:
BENEFICIARY
EXECUTED as a DEED by )
BANK OF SCOTLAND PLC acting by its attorney in the presence of )
Witness's Signature:
Name:
Address:
BENEFICIARY
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 1) LIMITED acting by two directors )
BENEFICIARY
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 2) LIMITED acting by two directors )
MORTGAGES TRUSTEE
EXECUTED as a DEED by )
83
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: )
FUNDING 1 SECURITY TRUSTEE
EXECUTED as a DEED by )
THE BANK OF NEW YORK )
FUNDING 2 SECURITY TRUSTEE
EXECUTED as a DEED by )
THE BANK OF NEW YORK )
84
