Exhibit 4.3
Dated [23] January 2004
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NORTHERN ROCK PLC
as Seller
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
- and -
THE BANK OF NEW YORK
as Security Trustee
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SEVENTH AMENDED
MORTGAGE SALE AGREEMENT
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SIDLEY XXXXXX XXXXX & XXXX
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF:634860
CONTENTS
Clause Page No.
1. Definitions and Construction......................................................4
2. Sale and Purchase of Initial Mortgage Portfolio...................................5
3. Initial Closing Date..............................................................5
4. Sale and Purchase of New Mortgage Portfolios......................................7
5. Trust of Monies..................................................................13
6. Perfection of the Assignment.....................................................15
7. Undertakings.....................................................................17
8. Warranties and Repurchase by the Seller..........................................21
9. Further Assurance................................................................26
10. Consequences of Breach...........................................................27
11. Subordination....................................................................27
12. Non-Merger.......................................................................27
13. No Agency or Partnership.........................................................27
14. Payments.........................................................................27
15. Assignment.......................................................................28
16. Security Trustee.................................................................28
17. New Intercompany Loans...........................................................29
18. Non Petition Covenant; Limited Recourse..........................................29
19. Amendments and Waiver............................................................30
20. Notices..........................................................................30
21. Third Party Rights...............................................................31
22. Execution in Counterparts; Severability..........................................31
23. Governing Law and Submission to Jurisdiction.....................................31
24. Process Agent....................................................................32
25. Appropriate Forum................................................................32
26. Transaction Documents............................................................33
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SCHEDULE 1 REPRESENTATIONS AND WARRANTIES................................................35
SCHEDULE 2 FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND AND SCOTTISH
TRANSFERS........................................................................44
SCHEDULE 3 ASSIGNMENT OF INSURANCE CONTRACTS.............................................52
SCHEDULE 4 INSURANCE CONTRACTS...........................................................54
SCHEDULE 5 Part 1 ASSIGNMENT OF GUARANTEES...............................................55
SCHEDULE 6 NEW MORTGAGE PORTFOLIO NOTICE.................................................60
SCHEDULE 7 LOAN REPURCHASE NOTICE........................................................63
SCHEDULE 8 FORM OF NOTIFICATION TO BORROWERS.............................................65
SCHEDULE 9 OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE LOANS)..............66
SCHEDULE 10 POWER OF ATTORNEY IN FAVOUR OF THE MORTGAGES TRUSTEE, FUNDING AND
THE SECURITY TRUSTEE.............................................................67
SCHEDULE 11 FORM OF SCOTTISH TRUST DEED.................................................70
SCHEDULE 12 LENDING CRITERIA............................................................77
SCHEDULE 13 STANDARD DOCUMENTATION......................................................80
APPENDIX A THE INITIAL MORTGAGE LOAN PORTFOLIO...........................................82
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THIS SEVENTH AMENDED MORTGAGE SALE AGREEMENT DATED [ ] January 2004 FURTHER
AMENDS AND RESTATES THE MORTGAGE SALE AGREEMENT DATED 26 MARCH 2001 BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited
company incorporated under the laws of England and Wales, whose
registered office is at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx
Xxxx XX0 0XX in its capacity as Seller and in its capacity as a
Beneficiary;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0
0XX, Channel Islands in its capacity as the Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out
of its branch office established in England (registered overseas
company number FC022999 and branch number BR005916) at 0 Xxxxx Xxxx
Xxxxx, Xxxxxx XX0X 0XX in its capacity as a Beneficiary; and
(4) THE BANK OF NEW YORK a New York banking corporation whose London
branch address is at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX in
its capacity as Security Trustee.
WHEREAS:
(A) The Seller carries on the business (inter alia) of originating
mortgage loans secured on residential properties in England, Wales and
Scotland.
(B) The Seller has agreed to sell and assign to the Mortgages Trustee
certain mortgage loans, together with the benefit of the related
security for the same, on the terms and subject to, the conditions set
out in this Mortgage Sale Agreement (the "Agreement").
(C) The Mortgages Trustee has agreed to hold certain of the above
mentioned mortgage loans as bare trustee for the Beneficiaries upon,
with and subject to the trusts, powers and provisions of the Mortgages
Trust Deed.
IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions and Construction
1.1. The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Seventh Amendment and Restatement Deed made on [ ] January
2004 between, among others, the Seller, Funding and the Mortgages
Trustee (as the same have been and may be amended, varied or
supplemented from time to time with the consent of the parties hereto)
are expressly and specifically incorporated into and shall apply to
this Agreement.
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2. Sale and Purchase of Initial Mortgage Portfolio
2.1 Agreement to Assign: Subject to Clause 2.2 (Conditions), in
consideration of the Purchase Price for the Initial Mortgage Portfolio
(which shall be paid in accordance with Clause 3.3 (Effect of Payment
of Initial Purchase Price)) and the covenant of the Mortgages Trustee
to hold the Trust Property upon trust for the Seller and Funding as
beneficiaries of the Mortgages Trust upon, with and subject to all the
trusts, powers and provisions of the Mortgages Trust Deed and the
Mortgages Trustee's agreement in Clause 3.5 (Early Repayment Charges)
to pay to the Seller any and all Early Repayment Charge Receipts, the
Seller hereby agrees to sell and assign the Initial Mortgage Portfolio
to the Mortgages Trustee on the Initial Closing Date with full title
guarantee.
2.2 Conditions: The obligation of the Seller under Clause 2.1 (Agreement
to Assign) shall be subject to and conditional upon:
(a) the issue by the First Issuer of the Notes on the Initial
Closing Date and the borrowing by Funding of the amount
provided for under the First Issuer Intercompany Loan
Agreement;
(b) the constitution of the Mortgages Trust on or prior to the
Initial Closing Date;
(c) the Transaction Documents having been executed and delivered
by the parties thereto on or before the Initial Closing Date
or, in the case of any Transaction Documents which are to be
executed immediately after the Initial Closing Date, the same
having been executed and being available for delivery and none
of the parties knowing of any reason why the same should not
be delivered immediately thereafter;
(d) the payment of the Initial Contribution by Funding to the
Mortgages Trustee in accordance with the terms of the
Mortgages Trust Deed; and
2.3 the payment of the Initial Purchase Price by the Mortgages Trustee to
the Seller in accordance with paragraph (a) of Clause 3.2 (Purchase
Price).
3. Initial Closing Date
3.1 Initial Closing and Conditions Precedent: A meeting shall take place
on the Initial Closing Date at the offices of Xxxxx & Xxxx, 0 Xxxxxxx
Xxxxx, Xxxxxx XX0X 0XX, or such offices as the parties may agree, at
which the Seller shall deliver to the Security Trustee (upon request),
Funding and the Mortgages Trustee or the representative of such party
(or procure such delivery to such party of) the following documents:
(a) an original power of attorney in the form set out in Schedule
10 (Power of Attorney in favour of the Mortgages Trustee,
Funding and the Security Trustee) duly executed by the Seller;
(b) a certificate of solvency in relation to the Seller dated as
at the Initial Closing Date (in the form of the agreed draft)
duly executed by the Seller;
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(c) a list of the Mortgage Loans in the Initial Mortgage
Portfolio;
(d) an assignment of the Insurance Contracts to the extent that
such Insurance Contracts relate to the Initial Mortgage
Portfolio in the form set out in Schedule 3 (Assignment of
Insurance Contracts) duly executed by the Seller; and
(e) a certified copy of the board minutes of the securitisation
sub-committee of the Seller authorising its duly appointed
representatives to agree the sale and assignment of the
Initial Mortgage Portfolio and authorising the execution and
performance of this Agreement, the Mortgages Trust Deed, the
Administration Agreement, the other Transaction Documents and
all of the documentation to be entered into pursuant to the
Transaction Documents.
3.2 Purchase Price: Subject to fulfilment of the conditions referred to in
paragraphs (a) to (and including) (d) of Clause 2.2 (Conditions) and
Clause 3.1 (Initial Closing and Conditions Precedent), the Mortgages
Trustee shall pay the Purchase Price for the Initial Mortgage
Portfolio to the Seller, in the manner that the Seller directs, for
value, as follows:
(a) the Initial Purchase Price for the Initial Mortgage Portfolio
shall be paid by the Mortgages Trustee to the Seller on the
Initial Closing Date (which Initial Purchase Price shall be
paid by the Mortgages Trustee from funds received by the
Mortgages Trustee from Funding on such date in respect of
Funding's Initial Contribution for the Funding Share of the
Closing Trust Property pursuant to the Mortgages Trust Deed);
(b) subject to and in accordance with the Mortgages Trustee
Revenue Priority of Payments, an amount of Deferred Purchase
Price in respect of the Mortgage Portfolio shall be paid by
the Mortgages Trustee to the Seller on each Distribution Date
but only from and to the extent (if any) of any Relevant
Distribution (as defined under paragraph (b) of Clause 4.2
(Consideration provided by Funding) of the Mortgages Trust
Deed) available for payment on such date and in an amount
equal to the Deferred Contribution for the Funding Share of
the Trust Property paid by Funding to the Mortgages Trustee on
such date or in respect of which the payment of such Deferred
Contribution is otherwise satisfied on such date in accordance
with the Mortgages Trust Deed; and
(c) a final amount of Deferred Purchase Price in respect of the
Mortgage Portfolio shall be paid by the Mortgages Trustee to
the Seller following the receipt by the Mortgages Trustee from
Funding of any Final Deferred Contribution, which payment
shall be in an amount equal to such Final Deferred
Contribution for the Funding Share of the Trust Property paid
by Funding to the Mortgages Trustee or in respect of which the
payment of such Final Deferred Contribution is otherwise
satisfied in accordance with the Mortgages Trust Deed.
3.3 Effect of Payment of Initial Purchase Price: The parties hereto
acknowledge that the effect of the payment to the Seller by the
Mortgages Trustee of the Initial Purchase Price on the Initial Closing
Date will be the assignment to the Mortgages Trustee of the beneficial
ownership of, and all of the Seller's beneficial right, title,
interest and benefit in and to, the
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Initial Mortgage Portfolio subject to the terms and provisions of the
Mortgages Trust Deed, which assignment will be perfected upon the
occurrence of any of the events set forth in Clause 6 (Perfection of
the Assignment) and the transfer to the Mortgages Trustee of legal
title to the Initial Mortgage Portfolio in accordance with Clause 6
(Perfection of the Assignment).
3.4 Documents: The Seller undertakes that from the Initial Closing Date
until the perfection of the assignment in accordance with Clause 6.1
(Perfection Events) and delivery of the Title Deeds in accordance with
Clause 6.2 (Perfection), the Seller shall hold the deeds and documents
constituting the Title Deeds and Mortgage Loan Files and all other
certificates, notices, policies, endorsements and other matters
necessary to establish title thereto relating to the Mortgage
Portfolio that are in its possession or under its control or held to
its order to the order of the Mortgages Trustee or the Security
Trustee or as the Mortgages Trustee or the Security Trustee shall
direct.
3.5 Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
the Seller as part of the Deferred Purchase Price any and all Early
Repayment Charge Receipts received by the Mortgages Trustee in respect
of the Mortgage Loans included in the Initial Mortgage Portfolio
PROVIDED THAT, if any Mortgage Loans in respect of which Early
Repayment Charges are payable are the subject of a trust pursuant to
Clause 5.1 (Trust in favour of Mortgages Trustee), the Seller, the
Mortgages Trustee, Funding and the Security Trustee agree that the
benefit of any Early Repayment Charges payable under such Mortgage
Loan shall, on the date of payment to the Seller of the related Early
Repayment Charge Receipts, be released from such trust.
3.6 Insurance: The Seller shall as soon as reasonably practical after the
sale and assignment of the Initial Mortgage Portfolio on the Initial
Closing Date procure that the respective interests of the Mortgages
Trustee, Funding and the Security Trustee are noted by the relevant
insurers in relation to each Insurance Contract.
4. Sale and Purchase of New Mortgage Portfolios
4.1 Agreement to Assign: Subject to fulfilment of the conditions set out
in Clauses 2.2 (Conditions), 3.1 (Initial Closing and Conditions
Precedent), 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans) and 4.3 (No Further Assignment), in consideration of either:
(a) the Purchase Price, if any is payable (which if it is payable
shall be paid in accordance with Clause 4.5 (Purchase Price)),
for the New Mortgage Portfolio and the covenant by the
Mortgages Trustee to hold the Trust Property upon trust for
the Seller and Funding as beneficiaries of the Mortgages
Trust, upon, and with and subject to the trusts, powers and
provisions of the Mortgages Trust Deed; or
(b) the covenant by the Mortgages Trustee to hold the Trust
Property upon trust for the Seller and Funding as
beneficiaries of the Mortgages Trust upon, and with and
subject to the trusts, powers and provisions of the Mortgages
Trust Deed,
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and (in either case) the Mortgages Trustee's agreement in Clause 4.8
(Early Repayment Charges) to pay to the Seller any and all Early
Repayment Charge Receipts, if the Seller shall at any time and from
time to time serve a properly completed New Mortgage Portfolio Notice
as set out in Schedule 6 (New Mortgage Portfolio Notice) on the
Mortgages Trustee and Funding with a copy (upon request) to the
Security Trustee (such service to be in the Seller's sole discretion),
then on the Assignment Date specified in the New Mortgage Portfolio
Notice the Seller agrees that it shall sell and assign to the
Mortgages Trustee the relevant New Mortgage Portfolio with full title
guarantee (or, in relation to assets and rights situated in or
governed by the law of Scotland, with absolute warrandice), PROVIDED
THAT (a) the Seller hereby covenants and undertakes that it will not
sell and assign New Mortgage Loans to the Mortgages Trustee during any
Trust Calculation Period prior to the Distribution Date in such Trust
Calculation Period, and (b) the Seller hereby agrees that it is only
permitted to make one sale and assignment of New Mortgage Loans to the
Mortgages Trustee during any Trust Calculation Period.
4.2 Conditions to Effecting an Assignment of New Mortgage Loans: The
conditions to be met as at each Assignment Date in order to effect a
sale and assignment of New Mortgage Loans are:
(a) the aggregate Arrears of Interest in respect of all of the
Mortgage Loans in the Mortgages Trust, as a percentage of the
aggregate gross interest due during the previous 12 months on
all Mortgage Loans outstanding during all or part of such
period, does not exceed 2 per cent., or such other percentage
as agreed to by the Rating Agencies on such Assignment Date.
"Arrears of Interest" for this purpose in respect of a
Mortgage Loan on any date means the aggregate amount overdue
on the Mortgage Loan on that date, but only where such
aggregate amount overdue equals or exceeds an amount equal to
the Monthly Payment then due on the Mortgage Loan and such
amount has been overdue for an entire calendar month;
(b) the long term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller are rated no lower than A3 by
Xxxxx'x and A- by Fitch at the time of, and immediately
following, the assignment of the New Mortgage Loans to the
Mortgages Trustee;
(c) on the relevant Assignment Date, the aggregate Current Balance
of the Mortgage Loans in the Mortgages Trust, in respect of
which the aggregate amount is then in arrears for at least 3
months, is less than 4 per cent. of the aggregate Current
Balance of all Mortgage Loans in the Mortgages Trust on such
Assignment Date, unless the Rating Agencies have confirmed
that the then current ratings of the Notes will not be
adversely affected;
(d) the Lending Criteria applicable at the time of origination of
each relevant New Mortgage Loan have been applied to the New
Mortgage Loan and to the circumstances of the Borrower at the
time the New Mortgage Loan was made, provided that material
variations from such Lending Criteria may occur so long as the
Rating Agencies have been notified of any such material
variations;
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(e) no New Mortgage Loan has on the relevant Assignment Date an
aggregate amount in arrears which is greater than the amount
of the Monthly Payment then due;
(f) the Rating Agencies have not provided written confirmation to
the Mortgages Trustee, the Security Trustee and the Issuer
that the assignment to the Mortgages Trustee of the New
Mortgage Loans on the Assignment Date will adversely affect
the then current ratings of the existing Notes of any Issuer
(provided that, in respect of the assignment by the Seller to
the Mortgages Trustee of a New Mortgage Portfolio in
connection with the issuance by a New Issuer of New Notes and
the drawing by Funding of a New Intercompany Loan, the
condition to be met at the relevant Assignment Date of such
New Mortgage Portfolio will be that the Rating Agencies have
confirmed in writing to the Mortgages Trustee, the Security
Trustee and the Issuer that the assignment to the Mortgages
Trustee of the New Mortgage Portfolio on such Assignment Date
will not adversely affect the then current ratings of the
existing Notes of any Issuer);
(g) the aggregate Current Balance of New Mortgage Loans
transferred in any one Interest Period does not exceed 10 per
cent. of the aggregate Current Balance of Mortgage Loans in
the Mortgages Trust as at the beginning of that Interest
Period;
(h) each Issuer Reserve Fund is fully funded on the relevant
Assignment Date up to the relevant required amount or, if any
Issuer Reserve Fund is not so fully funded, no payments have
been made from such Issuer Reserve Fund;
(i) no Intercompany Loan Enforcement Notice has been served in
respect of any Intercompany Loan;
(j) the assignment of the New Mortgage Portfolio on the relevant
Assignment Date does not result in the product of WAFF and
WALS for the Mortgage Portfolio after such purchase,
calculated on the relevant Assignment Date in the same way as
for the Initial Mortgage Portfolio (or as agreed by the
Administrator and the Rating Agencies from time to time),
exceeding the product of WAFF and WALS for the Mortgage
Portfolio calculated on the most recent preceding Closing Date
plus 0.35 per cent.;
(k) to the extent necessary, each Issuer has entered into
appropriate hedging arrangements in respect of such New
Mortgage Loans before such Mortgage Loans are assigned to the
Mortgage Trust;
(l) no event of default under the Transaction Documents has
occurred which is continuing as at the relevant Assignment
Date;
(m) the weighted average yield on the Mortgage Portfolio together
with the New Mortgage Portfolio to be assigned to the
Mortgages Trustee on the relevant Assignment Date is not less
than LIBOR for three-month sterling deposits plus [0.56] per
cent., taking into account the weighted average yield on the
Mortgage Loans and the margins on any Basis Rate Swaps as at
the relevant Assignment Date;
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(n) the assignment of the New Mortgage Portfolio on the relevant
Assignment Date does not result in the weighted average loan
to value ratio of Mortgage Loans in the Mortgage Portfolio on
the relevant Assignment Date (after the purchase of the New
Mortgage Portfolio) after application of the LTV Test on the
relevant Assignment Date exceeding the loan to value ratio
(based on the LTV Test) of Mortgage Loans in the Mortgage
Portfolio on the most recent preceding Closing Date plus 0.25
per cent.;
(o) no New Mortgage Loan has a maturity date on or after January
2039;
(p) the related Borrower under each New Mortgage Loan has made at
least one Monthly Payment;
(q) for so long as any Notes issued by any Issuer that have a
Final Repayment Date earlier than January 2041 are
outstanding, the assignment of New Mortgage Loans to the
Mortgages Trustee may only occur if, following such
assignment, the aggregate number of Repayment Mortgage Loans
in the Mortgage Portfolio is greater than or equal to 25 per
cent. of the aggregate number of Mortgage Loans in the
Mortgage Portfolio;
(r) the Rating Agencies have provided written confirmation that
the then current ratings on the Notes would not be adversely
affected by the assignment to the Mortgages Trustee of a New
Mortgage Loan in respect of a mortgage loan product having
characteristics and/or features that differ materially from
the characteristics and/or features of the Mortgage Loans in
the Initial Mortgage Portfolio;
(s) save as provided otherwise in respect of Personal Secured
Loans, the Seller shall as at the relevant Assignment Date
make the Representations and Warranties to the Mortgages
Trustee, Funding and the Security Trustee in relation to each
New Mortgage Loan in the New Mortgage Portfolio being sold on
the relevant Assignment Date in accordance with Clause 8
(Warranties and Repurchase by the Seller) and such
Representations and Warranties must be true in relation to
each New Mortgage Loan (but if such Representation and
Warranties are only discovered to be untrue after the relevant
Assignment Date, the Mortgages Trustee's only remedy shall be
under Clause 7 (Undertakings); and
(t) following the purchase by the Mortgages Trust of any New
Mortgage Portfolio, the aggregate Current Balance of Mortgage
Loans in the Mortgages Trust that are subject to a maximum
rate of interest and which charge interest at the lesser of
the Seller's Standard Variable Rate and the maximum rate of
interest (as specified in the relevant Mortgage Conditions)
(the "Capped Rate Mortgage Loans") will not exceed 10 per.
cent of the aggregate Current Balance of all Mortgage Loans in
the Mortgages Trust (including such Capped Rate Mortgage
Loans) as of such Assignment Date,
PROVIDED THAT, if an Initial Purchase Price is payable to the Seller
by the Mortgages Trustee on the relevant Assignment Date, only the
conditions set out in paragraphs (e), (f), (i), (k), (l), (m), (o),
(p), (q), (r) and (s) are required to be satisfied to effect an
assignment of the New Mortgage Loans.
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Notwithstanding the foregoing, the Mortgages Trustee may waive or vary
any of the conditions set forth in Clause 4.2 provided that each of
the Rating Agencies has confirmed in writing (whether or not such
confirmation is addressed to the Mortgages Trustee) that the relevant
waiver or variation will not adversely affect the then current ratings
of the existing Notes of any Issuer or that it approves the relevant
waiver or variation.
4.3 No Further Assignment: The Seller and the Mortgages Trustee agree that
the Seller may not sell and assign any New Mortgage Portfolio after
the Step-up Date in respect of the Notes of any Issuer if the option
to redeem any such Notes on the related Step-up Date pursuant to
Condition 5(D) of those Notes is not exercised.
4.4 Closing and Conditions Precedent: A meeting shall take place on the
date of the sale and assignment of the relevant New Mortgage Portfolio
at the offices of the Seller or at such other office as may be agreed
by the parties at which the Seller shall deliver to the Security
Trustee or its representative the following documents:
(a) a certificate of solvency in relation to the Seller dated the
relevant Assignment Date (in the form of the agreed draft)
duly executed by the Seller;
(b) an assignment of the Insurance Contracts to the extent that
such Insurance Contracts relate to the New Mortgage Portfolio
in the form set out in Schedule 3 (Assignment of Insurance
Contracts) duly executed by the Seller;
(c) a certificate of a duly authorised officer of the Seller
attaching a copy of the board minutes referred to in paragraph
(e) of Clause 3.1 (Initial Closing and Conditions Precedent)
and confirming that the resolutions referred to therein are in
full force and effect and have not been amended or rescinded
as at the date of the certificate; and
(d) a Scottish Trust Deed in respect of the Scottish Mortgage
Loans in the New Mortgage Portfolio (if any) and their Related
Security, in the form set out in Schedule 11 and with the
annexure thereto duly completed, duly executed by the Seller,
the Mortgages Trustee and Funding.
4.5 Purchase Price: Subject to fulfilment of the conditions referred to in
Clauses 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans), 4.3 (No Further Assignment) and 4.4 (Closing and Conditions
Precedent), the Mortgages Trustee shall, if and to the extent that the
same is payable, pay the Purchase Price for the New Mortgage Portfolio
to the Seller, in the manner that the Seller directs, for value, as
follows:
(a) (if any Initial Purchase Price is payable in respect of the
New Mortgage Portfolio which shall only be the case if an
Initial Contribution is paid by Funding to the Mortgages
Trustee on such date pursuant to the terms of the Mortgages
Trust Deed) the Initial Purchase Price for the New Mortgage
Portfolio shall be paid by the Mortgages Trustee to the Seller
on the relevant Assignment Date (which Initial Purchase Price
shall be paid by the Mortgages Trustee from funds received by
the Mortgages Trustee from Funding on such date in respect of
Funding's Initial Contribution for the Funding Share of the
New Trust Property pursuant to the
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Mortgages Trust Deed), PROVIDED THAT if on any date the Seller
is obliged to repurchase any Mortgage Loan or Mortgage Loans
pursuant to Clause 8.4 (Repurchase), 8.5 (Purchase of Product
Switches, Further Advances and purchases relating to Personal
Secured Loans) or 8.6 (Repurchase of Fixed Rate Mortgage
Loans), and on such date the Seller sells and assigns New
Mortgage Loans and their Related Security to the Mortgages
Trustee, the Seller is entitled to set-off against the
repurchase price payable by it on such repurchase as set forth
under Clause 8.7 (Completion of Repurchase) the amount of any
Initial Purchase Price payable for any such New Mortgage Loans
and shall instead pay (or be paid) such net amount; and
(b) subject to and in accordance with the Mortgages Trustee
Revenue Priority of Payments, an amount of Deferred Purchase
Price in respect of the Mortgage Portfolio shall be paid by
the Mortgages Trustee to the Seller on each Distribution Date
but only from and to the extent (if any) of any Relevant
Distribution (as defined under paragraph (b) of Clause 4.2
(Consideration provided by Funding) of the Mortgages Trust
Deed) available for payment on such date and in an amount
equal to the Deferred Contribution for the Funding Share of
the Trust Property paid by Funding to the Mortgages Trustee on
such date or in respect of which the payment of such Deferred
Contribution is otherwise satisfied on such date in accordance
with the Mortgages Trust Deed.
4.6 Effect of Payment of Initial Purchase Price or Fulfilment of
Conditions: The parties hereto acknowledge that the effect of either
the payment to the Seller by the Mortgages Trustee of the Initial
Purchase Price on the relevant Assignment Date or, if no Initial
Purchase Price is payable on such date, the confirmation from the
Seller of the fulfilment of the conditions referred to in Clauses 4.2
(Conditions to Effecting an Assignment of New Mortgage Loans) and the
delivery to the Security Trustee of the documents referred to in
Clause 4.4 (Closing and Conditions Precedent) on such date, will be
the assignment and transfer to the Mortgages Trustee of the beneficial
ownership of, and all of the Seller's beneficial right, title,
interest and benefit in and to, the New Mortgage Portfolio subject to
the terms and provisions of the Mortgages Trust Deed, which assignment
and transfer will be perfected upon the occurrence of any of the
events set forth in Clause 6 (Perfection of the Assignment) and the
transfer and assignation to the Mortgages Trustee of legal title to
such New Mortgage Portfolio in accordance with Clause 6 (Perfection of
the Assignment).
4.7 Documents: The Seller undertakes that from the relevant Assignment
Date until the perfection of the assignment in accordance with Clause
6.1 (Perfection Events) and the delivery of the Title Deeds in
accordance with Clause 6.2 (Perfection), the Seller shall hold the
deeds and documents constituting the Title Deeds and Mortgage Loan
Files and all other certificates, notices, policies, endorsements and
other matters necessary to establish title thereto relating to the
Mortgage Portfolio that are in its possession or under its control or
held to its order to the order of the Mortgages Trustee or as the
Mortgages Trustee shall direct.
4.8 Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
the Seller as part of the Deferred Purchase Price any and all Early
Repayment Charge Receipts received by the Mortgages Trustee in respect
of the Mortgage Loans included in the New Mortgage Portfolio
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PROVIDED THAT, if any Mortgage Loans in respect of which Early
Repayment Charges are payable are the subject of a trust pursuant to
Clause 5.1 (Trust in favour of Mortgages Trustee), the Seller, the
Mortgages Trustee, Funding and the Security Trustee agree that the
benefit of any Early Repayment Charges payable under such Mortgage
Loan shall, on the date of payment to the Seller of the related Early
Repayment Charge Receipts, be released from such trust.
4.9 Insurance: The Seller shall as soon as reasonably practical after
completion of the sale and assignment of each New Mortgage Portfolio
procure that the respective interests of the Mortgages Trustee,
Funding and the Security Trustee are noted by the relevant insurers in
relation to each Insurance Contract.
4.10 Mortgage Portfolio: Prior to the earlier to occur of:
(a) a Trigger Event; and
(b) (i) if Funding does not enter into a New Intercompany Loan
Agreement, the Payment Date in January 2008; or
(ii) if Funding does enter into New Intercompany Loan
Agreements, the latest Payment Date specified by
Funding by notice in writing to the Seller and the
Mortgages Trustee as applying in relation to this
covenant,
the Seller undertakes to use all reasonable efforts to offer
to sell and assign, in accordance with the provisions of this
Clause 4 (Sale and Purchase of New Mortgage Portfolios), to
the Mortgages Trustee and the Mortgages Trustee undertakes to
use all reasonable endeavours to acquire from the Seller and
to hold pursuant to the terms of the Mortgages Trust Deed,
sufficient New Mortgage Loans and their Related Security so
that the Overcollateralisation Test is not breached on three
consecutive Distribution Dates PROVIDED THAT the Seller shall
not be obliged to sell and assign to the Mortgages Trustee,
and the Mortgages Trustee shall not be obliged to acquire, New
Mortgage Loans and their Related Security if in the opinion of
the Seller the sale and assignment to the Mortgages Trustee of
New Mortgage Loans and their Related Security would adversely
affect the business of the Seller.
For the purposes of this Clause 4.10, the "Overcollateralisation Test"
shall be calculated on each Distribution Date and shall be breached on
any Distribution Date where the aggregate Current Balance of Mortgage
Loans in the Mortgage Portfolio on such Distribution Date is less than
an amount equal to the product of 1.05 and the Principal Amount
Outstanding of all Notes of all Issuers at such Distribution Date, and
for this purpose, where such Notes outstanding are Controlled
Amortisation Notes, the Principal Amount Outstanding of such Notes
will be calculated on a straight-line basis by applying the
appropriate CPR to such Notes on a monthly, rather than a quarterly
basis.
5. Trust of Monies
5.1 Trust in favour of Mortgages Trustee: Notwithstanding the assignment
and transfer effected by this Agreement (or by any Scottish Trust Deed
made pursuant hereto) if at, or at any other
13
time after, the Initial Closing Date or, as the case may be in respect
of any New Mortgage Portfolio, the relevant Assignment Date (but prior
to any repurchase in accordance with Clause 8.5 (Purchase of Product
Switches, Further Advances and purchases relating to Personal Secured
Loans)) the Seller holds, or there is held to its order, or it
receives, or there is received to its order any property, interest,
right or benefit and/or the proceeds thereof hereby agreed to be sold
to the Mortgages Trustee, the Seller undertakes with the Mortgages
Trustee, Funding and the Security Trustee that it will hold such
property, interest, right or benefit and/or the proceeds thereof upon
trust for the Mortgages Trustee (pursuant, in the case of any
property, interest, right or benefit and/or the proceeds thereof
relating to a Scottish Mortgage Loan or its Related Security, to the
relevant Scottish Trust Deed) subject at all times to the Mortgages
Trust. In addition, if for any reason the assignment and transfer of
the Initial Mortgage Portfolio, or any New Mortgage Portfolio (or any
part thereof), or any property, interest, right or benefit therein or
any of the proceeds thereof (each a "relevant asset"), is held to be
ineffective or unenforceable against any Borrower, the Seller
undertakes with the Mortgages Trustee, Funding and the Security
Trustee and hereby declares that it will hold such relevant asset upon
trust for the Mortgages Trustee. The Mortgages Trustee agrees that it
will hold its beneficial interest in such relevant asset subject at
all times to the Mortgages Trust.
5.2 Trust in favour of Seller: If at, or any time after, the Initial
Closing Date or, as the case may be in respect of any New Mortgage
Portfolio, the relevant Assignment Date, the Mortgages Trustee holds,
or there is held to its order, or it receives, or there is received to
its order, any property, interest, right or benefit relating to:
(a) any Mortgage Loan or Mortgage Loans under a Mortgage Account
and its Related Security repurchased by the Seller pursuant to
Clause 8 (Warranties and Repurchase by the Seller); or
(b) (without prejudice to Clause 10 (Consequences of Breach)) any
Early Repayment Charges payable by a Borrower in respect of
any Mortgage Loan in the Mortgages Trust;
and/or the proceeds thereof, the Mortgages Trustee undertakes with the
Seller that it will remit, assign or transfer the same to the Seller,
as the case may require, and until it does so or to the extent that
the Mortgages Trustee is unable to effect such remittance, assignment
or transfer, the Mortgages Trustee undertakes to hold such property,
interest, right or benefit and/or the proceeds thereof upon trust for
the Seller as the sole beneficial owner thereof or as the Seller may
direct provided that the Mortgages Trustee shall not be in breach of
its obligations under this Clause 5 if, having received any such
moneys and paid them to third parties in error, it pays (at the
direction of the Beneficiaries) to the Seller an amount equal to the
moneys so paid in error in accordance with the Administration
Agreement. In addition, if the Seller is required or elects to
repurchase any Mortgage Loan and its Related Security pursuant to
Clauses 8.4 (Repurchase), 8.5 (Purchase of Product Switches, Further
Advances and purchases relating to Personal Secured Loans) or 8.6
(Repurchase of Fixed Rate Mortgage Loans) and such Mortgage Loan or
its Related Security, or any part thereof, or any property, interest,
right or benefit therein or any of the proceeds thereof (each, a
"relevant
14
asset"), is held by the Seller subject to a trust pursuant to Clause
5.1 (Trust in favour of Mortgages Trustee), then the Seller, the
Mortgages Trustee, Funding and the Security Trustee agree that such
relevant asset shall be released from the trust constituted pursuant
to Clause 5.1 (Trust in favour of Mortgages Trustee) on the date that
such relevant asset would otherwise have been repurchased or
re-transferred pursuant to Clause 8.7 (Completion of Repurchase).
6. Perfection of the Assignment
6.1 Perfection Events: The execution of transfers and assignations of the
Mortgages to the Mortgages Trustee and the notifications to Borrowers
notifying such Borrowers of the assignment or assignation of their
Mortgage Loans and Related Security to the Mortgages Trustee shall be
completed within 20 business days of receipt of a written request in
accordance with Clause 6.2 (Perfection) upon the occurrence of any of
the following events:
(a) the valid service of an Intercompany Loan Enforcement Notice
or a Note Enforcement Notice, provided that the perfection of
an assignment of the Mortgage Portfolio shall not be required
if the sole reason for the service of any Note Enforcement
Notice is a default by a Currency Swap Provider of any Issuer;
or
(b) unless otherwise agreed by the Rating Agencies, the
termination of the Seller's role as Administrator under the
Administration Agreement and failure of any substitute
administrator to assume the duties of the Administrator; or
(c) the Seller being required by an order of a court of competent
jurisdiction, or by a change in law occurring after the
Initial Closing Date, or by a regulatory authority of which
the Seller is a member or with whose instructions it is
customary that the Seller comply, to perfect the transfer of
legal title to the Mortgage Loans and the Related Security in
favour of the Mortgages Trustee; or
(d) the security under the Funding Deed of Charge or any material
part of such security being in jeopardy and it being necessary
to perfect the transfer of legal title to the Mortgage Loans
and their Related Security in favour of the Mortgages Trustee
in order to reduce such jeopardy materially; or
(e) the occurrence of an Insolvency Event in relation to the
Seller; or
(f) notice in writing from the Seller to the Mortgages Trustee and
Funding (with a copy to the Security Trustee) requesting such
transfer.
6.2 Perfection: If an event set forth in any of paragraphs (a) to (f) of
Clause 6.1 (Perfection Events) occurs and either the Mortgages Trustee
or Funding (with the consent of the Security Trustee) or the Security
Trustee so requests in writing, the Seller shall perfect the
assignments as contemplated by and in accordance with this Clause 6
(Perfection of the Assignment) in relation to all Mortgage Loans then
in the Mortgage Portfolio and shall:
15
(a) deliver to the Mortgages Trustee all Title Deeds and (subject
to receipt of up to date schedules) the transfers and
assignations referred to in Clause 6.3 (Transfer Documents)
duly executed by the Seller; and
(b) give formal notice of the transfers and assignations to the
relevant Borrowers, insurers and other persons (all such
notices being in such form or forms as may be required by the
Mortgages Trustee or Funding (with the written consent of the
Security Trustee) or the Security Trustee.
6.3 Transfer Documents: If an event set forth in any of paragraphs (a) to
(f) of Clause 6.1 (Perfection Events) occurs, the transfers that the
Seller is required to deliver are:
(a) transfers in the form set out in Part 1 of Schedule 2 (Form of
Transfer (Registered Land - England and Wales)) of all the
English Mortgages then in the Mortgage Portfolio secured (or
intended to be secured) over English Properties which comprise
registered land (including any English Property which is the
subject of an application for first registration at the Land
Registry);
(b) transfers in the form set out in Part 2 of Schedule 2 (Form of
Transfer (Unregistered Land - England and Wales)) of all the
English Mortgages then in the Mortgage Portfolio secured (or
intended to be secured) over English Properties which comprise
unregistered land (excluding any which is the subject of an
application for first registration);
(c) assignations in the form set out in Part 3 of Schedule 2 (Form
of Transfer (Land Register - Scotland)) of all the Scottish
Mortgages then in the Mortgage Portfolio secured (or intended
to be secured over Scottish Properties title to which is
registered (or in the course of being registered) in the Land
Register of Scotland;
(d) assignations in the form set out in Part 4 of Schedule 2 (Form
of Transfer (Sasine Register - Scotland)) of all the Scottish
Mortgages then in the Mortgage Portfolio secured (or intended
to be secured) over Scottish Properties title to which is
recorded (or in the course of being recorded) in the General
Register of Sasines;
(e) transfers and assignations of the benefit of the Guarantees
relating to any relevant Mortgage Loan in the form of the
Assignment of Guarantees set out in Part 1 of Schedule 5
(Assignment of Guarantees) in relation to Guarantees governed
by English law and in the form of the Assignation of
Guarantees set out in Part 2 of Schedule 5 (Assignation of
Guarantees) in relation to Guarantees governed by Scots law;
and
(f) transfers and assignations of the Related Security or any
other property or security sold to the Mortgages Trustee under
this Agreement in such form as the Mortgages Trustee or the
Security Trustee may reasonably require.
The Mortgages Trustee or Funding (with the consent of the Security
Trustee) or the Security Trustee may require that the form of any
transfer or assignation referred to in this Clause 6.3 be changed at
any time to reflect changes in law or relevant registry practice or
requirements.
16
6.4 Prior to Perfection: Prior to perfection pursuant to Clause 6.1
(Perfection Events) and subject to Clause 7.3 (Seller Ratings) and
Clauses 3.6 (Insurance) and 4.9 (Insurance) neither the Mortgages
Trustee nor Funding nor the Security Trustee will:
(a) register or record itself at, or 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 H.M.
Land Registry or in the Registers of Scotland or at H.M. Land
Registry in relation to the Mortgages Trustee's and/or
Funding's interests in the Mortgage Portfolio;
(b) give or require the giving of any notice to any Borrower,
insurer or any other person of the assignment or assignation
of that Borrower's Mortgage Loan and its Related Security or
such other property as may be included in the Mortgage
Portfolio to the Mortgages Trustee or the charge by Funding of
Funding's beneficial interest in that Borrower's Mortgage Loan
and its Related Security or such property to the Security
Trustee pursuant to the Funding Deed of Charge; or
(c) send or require to be sent to any solicitor who has acted on
behalf of the Seller in respect of any Mortgage with respect
to which the Seller has not received a complete set of the
Title Deeds a letter or other communication requiring such
solicitor to hold such documents to the order of the Mortgages
Trustee or the Security Trustee (as the case may be).
6.5 Further Assurance: The Seller shall, subject to the other provisions
of this Clause 6 (Perfection of the Assignment), upon request do all
such other deeds, assurances, agreements, instruments, acts and things
as the Mortgages Trustee, Funding or the Security Trustee may require
in order to give effect to the terms of this Agreement and the
assignments and assignations contemplated herein.
7. Undertakings
7.1 Administration: The Mortgages Trustee and Funding undertake that they
will at all times (or will direct the Administrator at all times to)
administer and enforce (and exercise their powers and rights and
perform their obligations under) the Mortgage Loans comprised in the
Mortgage Portfolio and their Related Security in accordance with the
Administration Procedures (for so long as these exist and thereafter
in accordance with such policies as would be applied by a reasonable,
prudent mortgage lender in the conduct of its business).
7.2 Reimbursement of Borrower: The Seller hereby undertakes with the
Mortgages Trustee and Funding that, in the event that any Borrower
establishes that it has at any time prior to the Initial Closing Date
or, as the case may be, the relevant Assignment Date, paid to the
Seller any amounts in excess of sums due to the Seller as at the date
of payment under the Mortgage Conditions applicable to that Mortgage
Loan (other than any Overpayment made by a Borrower under Flexible
Mortgage Loan) the Seller will reimburse the Borrower for such
overpayment together with any interest, cost or other expense
associated therewith. The Seller further agrees to hold the Mortgages
Trustee and Funding harmless against any such claims and to indemnify
the Mortgages Trustee and Funding on an after Tax basis in relation
17
to any costs, expense, loss or other claim which may arise in
connection therewith. Any payment made by the Seller to the Mortgages
Trustee and Funding in discharge of the foregoing indemnity shall be
regarded as a rebate of part of the Purchase Price of the relevant
Mortgage Loan.
7.3 Seller Ratings: The Seller hereby undertakes with the Mortgages
Trustee, Funding and the Security Trustee that if the long term
unsecured, unsubordinated and unguaranteed debt obligations of the
Seller cease to be assigned a long term credit rating:
(a) from Xxxxx'x of no lower than Baal or from Fitch of no lower
than BBB+, the Seller (unless Xxxxx'x or Fitch, as applicable,
confirms that the then current ratings of the Notes will not
be adversely affected) will deliver to the Mortgages Trustee,
Funding, the Security Trustee (upon request) and the Rating
Agencies details of the names and addresses of the Borrowers
with Mortgage Loans then in the Mortgage Portfolio on computer
diskette and a draft letter of notice to such Borrowers of the
sale and assignment of those Mortgage Loans and the Related
Security to the Mortgages Trustee in the form set out in
Schedule 8 (Form of Notification to Borrowers); and
(b) from S&P of no lower than BBB-, from Xxxxx'x of no lower than
Baa3 or from Fitch of no lower than BBB-, the Seller (unless
S&P, Xxxxx'x and Fitch, as applicable, confirms that the
then-current ratings of the Notes will not be adversely
affected) shall within 10 Business Days of such cessation give
notice of the sale and assignment effected by this Agreement
(and, in the case of any Scottish Mortgage Loan, the making of
the relevant Scottish Trust Deed) to each Borrower with a
Mortgage Loan then in the Mortgage Portfolio in the form set
out in Schedule 8 (Form of Notification to Borrowers) (and if
the Seller fails to give such notice, then the Mortgages
Trustee shall give such notice as the Seller's attorney under
the power of attorney set out in Schedule 10 (Power of
Attorney in favour of the Mortgages Trustee, Funding and the
Security Trustee)),
(c) provided that, in respect of Clause 7.3(a), should the Seller
be required as described in such Clause to provide the details
of the names and addresses of Borrowers to the Mortgages
Trustee and Funding, each of the Mortgages Trustee and Funding
(to the extent, in respect of Funding, that such information
is to be delivered to Funding other than at its United Kingdom
branch office) hereby agrees to appoint an agent that is
located in the United Kingdom and which maintains all
appropriate registrations, notifications, licences and
authorities (if any) required under the Data Protection Xxx
0000 to receive and maintain such information on its behalf,
and under no circumstances shall either the Mortgages Trustee
or Funding accept such information at its Jersey registered
office or otherwise in Jersey (unless Jersey is declared an
"approved state" by the European Commission, in which case
such data may be delivered to the Mortgages Trustee and/or
Funding at their respective Jersey offices).
7.4 Pending Perfection: The Seller undertakes to the Mortgages Trustee,
Funding and the Security Trustee that, pending perfection under Clause
6 (Perfection of the Assignment), the Seller:
18
(a) shall promptly notify the Mortgages Trustee, Funding and (upon
request) the Security Trustee if it receives written notice of
any litigation or claim calling into question in any material
way the Seller's or the Mortgages Trustee's title to any
Mortgage Loan comprised in the Mortgage Portfolio or its
Related Security or if it becomes aware of any material breach
of any of the Representations and Warranties or other
obligations under this Agreement; and
(b) shall, if reasonably required so to do by the Mortgages
Trustee, participate or join in and lend its name to and take
such other steps as may reasonably be required by the
Mortgages Trustee in relation to, any legal proceedings in
respect of the Mortgage Loans and the Related Security to the
extent necessary to protect, preserve and enforce the Seller's
or the Mortgages Trustee's or Funding's or the Security
Trustee's title to or interest in any Mortgage Loan or its
Related Security provided that the Seller is reimbursed,
subject to and in accordance with the relevant priority of
payments under and in accordance with the Transaction
Documents, by the Mortgages Trustee or Funding for the
reasonable legal expenses and costs of such proceedings.
7.5 Responsibility of Seller: The Seller hereby further undertakes with
the Mortgages Trustee and Funding that it is and at all times shall
remain solely responsible for any Product Switches (other than a
Re-Fixed Mortgage Loan), for funding any Cash Re-Draws made by a
Borrower under a Flexible Mortgage Loan, for funding any request for
any Further Advance made by a Borrower, for funding any request for
any Further Draw under a Personal Secured Loan and for paying to the
Mortgages Trustee from time to time an amount equal to the Unpaid
Interest associated with any Non-Cash Re-Draw made by a Borrower under
a Flexible Mortgage Loan. For the avoidance of doubt, neither the
Mortgages Trustee nor Funding will be required to advance moneys to
the Seller or to a Borrower in order to fund such a Re-Draw or Further
Advance or Further Draw in any circumstances whatsoever.
7.6 Product Switches and Further Advances:
(a) Neither the Mortgages Trustee nor Funding shall (and each
shall procure that its agents do not):
(i) issue to any Borrower any offer of a Further Advance;
or
(ii) issue to any Borrower any offer of a Product Switch
(other than a Re-Fixed Mortgage Loan),
without first having given notice in writing to the Seller
seeking confirmation from the Seller that the Seller will
repurchase the Mortgage Loan to which such offer relates from
the Mortgages Trustee in accordance with the terms of this
Agreement.
(b) If the Seller gives such confirmation to the Mortgages
Trustee, the Mortgages Trustee (or its agents, including the
Administrator, on its behalf) shall then issue to that
Borrower the relevant offer referred to in paragraph (a) above
and shall (in the case of any offer referred to in paragraph
(a) above) then notify the Seller in writing as soon
19
as the Mortgages Trustee has accepted the mortgage
documentation completed by the Borrower in relation to such
offer.
(c) The Mortgages Trustee shall not itself make any Further
Advance or Product Switch (other than in relation to a
Re-Fixed Mortgage Loan).
7.7 Standard Variable Rate: Subject to the provisions of Clause 7.9, the
Seller covenants with and undertakes to the Mortgages Trustee, Funding
and the Security Trustee that, where the Administrator determines on
any date that there will be a Shortfall during the next succeeding
Interest Period and notifies the Seller to such effect, the Seller
shall take all steps which are necessary, including publishing any
notice which is required in accordance with the Mortgage Conditions,
to set the Standard Variable Rate and such other discretionary rates
and margins applicable to the Mortgage Loans at such levels as may be
notified to the Seller by the Mortgages Trustee, Funding or the
Security Trustee (which rates shall be the same rates as previously
notified to the Mortgages Trustee, Funding and the Security Trustee in
accordance with Clause 4.3(b) of the Administration Agreement) as
being the rates required in order for no Shortfall to arise.
7.8 Security Powers of Attorney: The Seller shall grant security powers of
attorney to the Mortgages Trustee, Funding and the Security Trustee in
the form set out in Schedule 10 (Power of Attorney in favour of the
Mortgages Trustee, Funding and the Security Trustee) allowing any of
the Mortgages Trustee, Funding and the Security Trustee and their
delegates from time to time (inter alia) to set the Standard Variable
Rate, such other discretionary rates and margins applicable to the
Mortgage Loans and (save for the Security Trustee) the rate of (and
terms relating to) the Existing Borrowers' Re-Fix Rate should the
Seller fail to do so in accordance with its obligations under this
Agreement, but only to the extent that such rates have been previously
notified to the Mortgages Trustee, Funding and the Security Trustee in
accordance with Clause 4.3(b) of the Administration Agreement. Nothing
in this Clause 7.8 shall prevent the Seller (or any of its attorneys
from time to time) from setting a higher Northern Rock Standard
Variable Rate or higher rates for other discretionary rates and
margins (or in the case of the Existing Borrowers' Re-Fix Rate setting
a higher rate and imposing terms more advantageous to the Mortgages
Trustee) than those to be set or required by the Mortgages Trustee,
Funding and (other than in respect to an Existing Borrower's Re-Fix
Rate) the Security Trustee.
7.9 Shortfall: Unless any of the Mortgages Trustee, Funding or the
Security Trustee needs to do so to avoid a Shortfall, none of the
Mortgages Trustee, Funding or the Security Trustee shall set the
Standard Variable Rate and other discretionary rates and margins for
Mortgage Loans which are in the Mortgages Trust (disregarding any
discounts or additions to it) at rates higher than the then equivalent
rates for mortgage loans which are not in the Mortgages Trust.
7.10 Forwarding of Notice: The Security Trustee undertakes, upon receipt of
any notice as specified in Clause 8.5(c) of the Mortgages Trust Deed,
to forward such notice to the Mortgages Trustee, Funding, the Seller
and the Cash Manager in the manner set forth in Clause 20 within three
(3) London Business Days of receipt thereof. The Security Trustee
shall have no other obligation other than the foregoing following
receipt of such notice.
20
8. Warranties and Repurchase by the Seller
8.1 Representations and Warranties: The Seller makes the Representations
and Warranties set out in Schedule 1 (Representations and Warranties)
to each of the Mortgages Trustee, Funding and the Security Trustee:
(a) in respect of each Mortgage Loan and its Related Security in
the Initial Mortgage Portfolio as at the date hereof and on
the Initial Closing Date;
(b) save as provided otherwise in Schedule 1 (Representations and
Warranties), in relation to each New Mortgage Loan and its
Related Security in a New Mortgage Portfolio, on the date of
the service of the relevant New Mortgage Portfolio Notice and
on the relevant Assignment Date;
(c) in the form set out in Part 2 of Schedule 1 (Representations
and Warranties) in relation to the matters and at the dates
set out therein; and
(d) in the form set out in Part 3 of Schedule 1 (Representations
and Warranties) in relation to the matters and at the dates
set out therein.
8.2 Reliance: The Seller acknowledges that the Representations and
Warranties are made with a view to inducing the Mortgages Trustee,
Funding and the Security Trustee either to enter into this Agreement
and the other Transaction Documents to which each is a party or to
agree to purchase the New Mortgage Loans and their Related Security
comprised in each New Mortgage Portfolio, and that each of the
Mortgages Trustee, Funding and the Security Trustee has entered into
this Agreement and the other Transaction Documents to which it is a
party in reliance upon the Representations and Warranties
notwithstanding any information possessed or discoverable by the
Mortgages Trustee, Funding and/or the Security Trustee. The Mortgages
Trustee, Funding and the Security Trustee acknowledge that they have
not entered into this Agreement in reliance upon any representation,
warranty or undertaking other than those set out in this Agreement or
upon any other enquiry, investigation or search whatsoever.
8.3 Remedies: The Mortgages Trustee's, Funding's and the Security
Trustee's sole remedy in respect of a breach of any of the
Representations and Warranties shall be to take action under this
Clause 8 (Warranties and Repurchase by the Seller) or under Clause 8.4
(Adjustments to Trust Property) of the Mortgages Trust Deed.
Furthermore, in respect of any actual or alleged breach of Clause 8.1
(Representations and Warranties), the Mortgages Trustee, Funding or
the Security Trustee shall, as applicable:
(a) notify the Seller as soon as reasonably practicable following
any claim or intimation of claim by any person of or arising
from such actual or alleged breach and thereafter keep the
Seller informed in relation to such claim or intimation;
(b) not settle or compromise any such claim made or intimated or
otherwise do anything which may be prejudicial to the position
of the Seller in relation thereto having regard to this
Agreement, except pursuant to the written directions of the
Seller or with the
21
Seller's prior written approval, such directions and approval
not to be unreasonably withheld; and
(c) comply with the Seller's reasonable directions as to
answering, disputing, defending, compromising, settling, or
otherwise in relation to the claim made or initiated
(including without limitation the instruction of particular
legal advisers), and if and to the extent required by the
Seller, do such things as the Seller may reasonably require to
enable and authorise the Seller or persons nominated by the
Seller to answer, dispute, defend, compromise, settle or
otherwise deal with any such claim or intimated claim, or
mitigate loss or potential loss on behalf of the Mortgages
Trustee, subject in each case to the Seller indemnifying the
Mortgages Trustee, Funding and the Security Trustee against
the consequences of complying with the Seller's directions and
requirements.
8.4 Repurchase: Subject to Clause 8.14 (Repurchase Not Possible), in the
event of a material breach of any of the Representations or Warranties
in respect of any Mortgage Loan and/or its Related Security as at the
Initial Closing Date or, as the case may be, the relevant Assignment
Date, which could have a material adverse effect on the Mortgage Loan
and/or its Related Security (having regard to, among other things,
whether a loss is likely to be incurred in respect of the Mortgage
Loan to which the breach relates after taking account of the
likelihood of recoverability or otherwise of any sums under any
applicable insurance policies), and further provided that:
(a) the Mortgages Trustee, Funding or the Security Trustee has
given the Seller not less than 28 days' notice in writing;
(b) the Mortgages Trustee has obtained the consent of the Security
Trustee; and
(c) such breach, where capable of remedy, is not remedied to the
satisfaction of Funding and the Security Trustee within the 28
day period referred to in (a) (or such longer period as
Funding and the Security Trustee may direct the Mortgages
Trustee),
then at Funding's (with the consent of the Security Trustee) or the
Security Trustee's direction, the Mortgages Trustee may serve upon the
Seller a notice in the form of the Loan Repurchase Notice whereupon
the Seller will be required to repurchase (i) the relevant Mortgage
Loan and its Related Security and (ii) any other Mortgage Loan
(including, for the avoidance of doubt, any Personal Secured Loan)
secured or intended to be secured by that Related Security or any part
of it in accordance with Clause 8.7 (Completion of Repurchase) ,
provided, however, that the Security Trustee shall have no duty to
provide any such notice to the Seller or consider granting its consent
pursuant to this Clause 8.4 unless the Security Trustee has been
notified by a party to a Transaction Document of such material breach
of such Representation or Warranty which, in the opinion of such party
(as communicated to the Security Trustee), could have a material
adverse effect on the related Mortgage Loan and/or its Related
Security, taking into account the considerations provided in this
Clause 8.4, and further provided that prior to receipt of such notice
the Security Trustee shall be entitled to assume that no such material
breach has occurred.
22
8.5 Purchase of Product Switches, Further Advances and purchases relating
to Personal Secured Loans: In the event of there being at any date in
respect of any Mortgage Loan assigned to the Mortgages Trustee
hereunder a PS/FA/PSL Event (other than a Mortgage Loan becoming a
Re-Fixed Mortgage Loan, such PS/FA/PSL Event being dealt with under
Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans)), the Seller may
at any time serve notice in the form of the Loan Repurchase Notice on
the Mortgages Trustee whereupon the Mortgages Trustee will be required
to sell and to transfer to the Seller in accordance with Clause 8.7
(Completion of Repurchase):
(a) any Mortgage Loan subject to a PS/FA/PSL Event, together with
its Related Security;
(b) any other Mortgage Loan secured or intended to be secured by
the Related Security referred to in (a) above or any part of
it; and
(c) any other Mortgage Loan secured on the same Mortgaged Property
that secures the Mortgage Loan subject to a PS/FA/PSL Event,
together with its Related Security,
each such Mortgage Loan to be identified in the Loan Repurchase Notice
(any such Mortgage Loan or Mortgage Loans, a "PS/FA/PSL Mortgage
Loan"), free from the Mortgages Trust and any right or interest that
the Security Trustee may have in such PS/FA/PSL Mortgage Loan and its
Related Security under the Funding Deed of Charge. Any PS/FA/PSL
Mortgage Loan purchased by the Seller shall be released from the
Mortgages Trust and shall no longer constitute Trust Property and
shall be released from any right or interest that the Security Trustee
may have had in such Mortgage Loan and its Related Security under the
Funding Deed of Charge prior to such repurchase.
8.6 Repurchase of Fixed Rate Mortgage Loans
(a) Where a Mortgage Loan bears interest at a fixed rate for a
certain period (the "initial fixed rate period"), after the
expiry of which the Borrower is entitled to apply for a new
fixed rate (whether or not subject to certain conditions), the
Mortgages Trustee may by notice in writing to the Seller given
at any time not more than 60 days before the expiry of that
initial fixed rate period (which for the avoidance of doubt
shall exclude any period of extension to which the relevant
Borrower is entitled), offer to re-sell to the Seller that
Mortgage Loan together with its Related Security if that
Mortgage Loan becomes a Re-Fixed Mortgage Loan during the
3-month period immediately following the end of that initial
fixed rate period. The offer will be in writing in the form
set out in Schedule 9 (Offer under Clause 8.6 ) and will be
signed by or on behalf of the Mortgages Trustee.
(b) The Seller may accept the offer made in accordance with
paragraph (a) above on the date on which that Mortgage Loan
becomes a Re-Fixed Mortgage Loan during the 3-month period
immediately following the end of the initial fixed rate period
relating to it, only by payment to the Mortgages Trustee of
the consideration payable for the repurchase of the relevant
Mortgage Loan and its Related Security in accordance with
Clause 8.7 (Completion of Repurchase).
23
(c) The parties hereto acknowledge that the effect of the payment
to the Mortgages Trustee by the Seller of the consideration
for the repurchase of the relevant Mortgage Loan and its
Related Security in accordance with paragraph (b) above will
be the assignment and transfer to the Seller of the beneficial
ownership of, and all of the Mortgages Trustee's beneficial
right, title, interest and benefit in and to, that Mortgage
Loan, and completion of the repurchase shall be effected by
the parties in accordance with Clause 8.7 (Completion of
Repurchase).
(d) The Seller hereby covenants and undertakes that if it does not
accept the offer made by the Mortgages Trustee in accordance
with paragraph (b) above, then whether or not the Mortgage
Loan becomes a Re-Fixed Mortgage Loan, it will set the
Existing Borrowers' Re-Fix Rate applicable for the 3-month
period immediately after expiry of the initial fixed rate
period relating to that Mortgage Loan at a rate not less than
that (and on terms not less advantageous to the Mortgages
Trustee or Funding than those) notified from time to time to
the Seller by the Mortgages Trustee, Funding or the
Administrator as being required by the Mortgages Trustee or
Funding.
8.7 Completion of Repurchase: Completion of any repurchase or re-transfer
or purchase or transfer, as applicable, shall take place:
(a) in the case of any repurchase or re-transfer pursuant to
Clause 8.4 (Repurchase) or any purchase or transfer pursuant
to Clause 8.5 (Purchase of Product Switches, Further Advances
and purchases relating to Personal Secured Loans) on the first
London Business Day immediately following expiry of a period
of 10 days following the date of the service upon the Seller
of the relevant Loan Repurchase Notice or at the Seller's
earlier election; or
(b) in the case of any repurchase or re-transfer pursuant to
Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans),
immediately upon the Mortgage Loan becoming a Re-Fixed
Mortgage Loan,
whereupon, the Seller shall pay to the Mortgages Trustee an amount
equal to the Current Balance of such Mortgage Loan or Mortgage Loans
and any Related Security and all Arrears of Interest and Accrued
Interest relating thereto as at the date of completion of such
repurchase. The provisions of Clause 8.8 (Transfers), Clause 8.9
(Documentation) and Clause 8.16 (Scottish Trust) shall apply to any
such repurchase or re-transfer.
8.8 Transfers: On the date of completion of any repurchase of a Mortgage
Loan and its Related Security in accordance with this Clause 8
(Warranties and Repurchase by the Seller), the Mortgages Trustee and
Funding shall at the cost of the Seller execute and deliver or cause
their respective duly authorised attorneys to execute and deliver to
the Seller:
(a) if perfection of the assignment and assignation to the
Mortgages Trustee has occurred in accordance with Clause 6
(Perfection of the Assignment):
(i) if the relevant Mortgage is over Registered Land, a
transfer of such Mortgage to the Seller in the form of
the Registered Transfer; or
24
(ii) if the relevant Mortgage is over Unregistered Land, a
transfer to the Seller in the form of the Unregistered
Transfer; or
(iii) if the relevant Mortgage is a Scottish Mortgage, an
assignation to the Seller in the applicable form of
Scottish Transfer;
(b) a re-assignment or retrocession of the rights of the Mortgages
Trustee in respect of the relevant Related Security each in a
form reasonably acceptable to the Seller (which shall, in the
case of the re-assignment of the Insurance Contracts, be
substantially in the form of the Assignment of Insurance
Contracts set out in Schedule 3 (Assignment of Insurance
Contracts); and
(c) a notification to the Administrator that all further sums due
in respect of such repurchased Mortgage Loan are for the
Seller's account.
8.9 Documentation: Upon any completion of the repurchase of any Mortgage
Loan and its Related Security in accordance with this Clause 8
(Warranties and Repurchase by the Seller) the Seller shall cease to be
under any further obligation to hold any Title Deeds or other
documents relating to such Mortgage Loan or Mortgage Loans and its
Related Security to the order of the Mortgages Trustee and the
Security Trustee and if the Mortgages Trustee or the Security Trustee
then holds the Title Deeds, the Mortgages Trustee or, as the case may
be, the Security Trustee shall forthwith return them to the Seller.
Any such repurchase by the Seller of a Mortgage Loan or Mortgage Loans
and its or their Related Security shall constitute a discharge and
release of the Seller from any claims which the Mortgages Trustee
and/or Funding or the Security Trustee may have against the Seller
arising from the relevant Representation or Warranty in relation to
that Mortgage Loan or Mortgage Loans and its or their Related Security
only, but shall not affect any rights arising from a breach of any
other express provision of this Agreement or any Representation or
Warranty in relation to any other Mortgage Loan and other Related
Security.
8.10 Notification: Forthwith after the Seller becomes aware of any event
which may reasonably give rise to an obligation under Clause 8
(Warranties and Repurchase by the Seller) to repurchase any Mortgage
Loan it shall notify the Mortgages Trustee, Funding and the Security
Trustee in writing thereof as soon as reasonably practicable.
8.11 No Prejudice: The terms of this Clause 8 (Warranties and Repurchase by
the Seller) shall not prejudice the rights of the Mortgages Trustee or
the Beneficiaries under the Mortgages Trust Deed.
8.12 Claims against Seller: If a breach of a Representation or Warranty
arises in respect of any Mortgage Loan and (in either case) no
repurchase requirement arises in respect of the Seller pursuant to
this Clause 8 (Warranties and Repurchase by the Seller), neither the
Mortgages Trustee, Funding nor the Security Trustee shall have any
claim against the Seller in respect of, or in relation to, such breach
of Representation or Warranty in relation to that Mortgage. For the
avoidance of doubt, save as provided for in this Clause 8 (Warranties
and Repurchase by the Seller), the Seller is not obliged to repurchase
any other Mortgage Loan or its Related Security.
25
8.13 Assignment: If the Seller makes any payment to the Mortgages Trustee
GIC Account (or as the Mortgages Trustee shall direct) in full
satisfaction of any claim made by the Mortgages Trustee, Funding or
the Security Trustee in relation to any Representation or Warranty set
out in Schedule 1 (Representations and Warranties), the Mortgages
Trustee, Funding or the Security Trustee, as the case may be, shall
assign to the Seller such rights as they have against any third party
which relate to such claim.
8.14 Repurchase Not Possible: If a Mortgage Loan has never existed, or has
ceased to exist, such that it is not outstanding on the date on which
it is due to be repurchased pursuant to this Clause 8 (Warranties and
Repurchase by the Seller), the Seller shall not be obliged to
repurchase the Mortgage Loan and the Related Security but shall
instead indemnify the Mortgages Trustee, Funding and the Security
Trustee against any loss suffered by reason of any Representation or
Warranty relating to or otherwise affecting that Mortgage Loan being
untrue or incorrect by reference to the facts subsisting at the date
on which the relevant Representation or Warranty was given, provided
that the amount of such indemnity shall not exceed the sum of (i) the
Current Balance of the Mortgage Loan that would have been payable by
the Borrower in respect of such Mortgage Loan on and after the
relevant completion date for the repurchase in relation to such
Mortgage Loan had the Mortgage Loan existed and complied with each of
the Representations and Warranties set out Schedule 1 (Representations
and Warranties) as at such date in relation to such Mortgage Loan and
(ii) interest thereon from such relevant completion date at the
weighted average yield of the Mortgage Loans.
8.15 Indemnity: The Seller shall indemnify the Mortgages Trustee against
any loss suffered as a result of any Borrower exercising a Right of
Set Off against the Mortgages Trustee provided that the amount of such
indemnity in relation to any Mortgage Loan shall not exceed the sum of
the Current Balance of that Mortgage Loan and interest payable by the
Borrower under that Mortgage Loan as at the date that the Borrower
exercises the Right of Set Off. In this clause "Right of Set Off"
means any right of set off arising from a deposit of money made by the
Borrower with the Seller or from any transaction between the Borrower
and the Seller other than one relating to the Mortgage Loan.
8.16 Scottish Trust: Upon any completion of the repurchase of any Scottish
Mortgage Loan and its Related Security in accordance with this Clause
8 (Warranties and Repurchase by the Seller) such Scottish Mortgage
Loan and its Related Security shall thereupon be released from the
Scottish Trust and shall cease to form part of the Scottish Trust
Property.
9. Further Assurance
The parties hereto agree that they will co-operate fully to do all
such further acts and things and execute any further documents that
may be necessary or desirable to give full effect to the transactions
contemplated by this Agreement (but subject always to Clause 6
(Perfection of the Assignment)).
26
10. Consequences of Breach
Without prejudice to Clause 8 (Warranties and Repurchase by the
Seller), the Mortgages Trustee, Funding and the Security Trustee
severally acknowledge to and agree with the Seller, and the Security
Trustee acknowledges to and agrees with Funding and the Mortgages
Trustee, that the Seller shall have no liability or responsibility
(whether, in either case, contractual, 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 or
the assets comprised in the Funding Security constituted by the
Funding Deed of Charge by reason of such breach, act or omission. For
this purpose (and without limiting the scope of the above exclusion in
respect of indirect or consequential loss or damage) any loss or
damage suffered by the Mortgages Trustee and/or Funding or such assets
which would not have been suffered by it or such assets had the
breach, act or omission in question not also been or given rise to an
Event of Default or enforcement of the security constituted by the
Funding Deed of Charge shall be treated as indirect or consequential
loss or damage.
11. Subordination
The Seller agrees with the Mortgages Trustee, Funding and the Security
Trustee that on the enforcement of any Mortgage any sums owed to the
Seller by a Borrower secured under such Mortgage and the rights and
remedies of the Seller in respect of the sums owed to the Seller shall
at all times be subject and subordinated to any sums owed to the
Mortgages Trustee by the Borrower and to the rights and remedies of
the Mortgages Trustee in respect of such sums owed to the Mortgages
Trustee by the Borrower.
12. Non-Merger
Any term of this Agreement to which effect is not given on the Initial
Closing Date or on any Assignment Date (including in particular, but
without limitation, the liability of the Seller under the
Representations and Warranties and the provisions of Clause 4 (Sale
and Purchase of New Mortgage Portfolios)) shall not merge and shall
remain in full force and effect notwithstanding the sale and purchase
contemplated by this Agreement.
13. No Agency or Partnership
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any relationship
of agency, save as expressly provided herein, or partnership between
the parties and that in fulfilling its obligations hereunder, each
party shall be acting entirely for its own account.
14. Payments
All payments to be made pursuant to this Agreement shall be made in
sterling in immediately available funds without exercising or seeking
to exercise any right of set-off as may otherwise exist and shall be
deemed to be made when they are received by the payee and shall be
27
accounted for accordingly unless failure to receive any payment is due
to an error by the payee's bank.
15. Assignment
15.1 Assignment: Subject always to the provisions of Clause 16 (Security
Trustee), no party hereto shall be entitled to assign all or any part
of its rights or obligations hereunder to any other party without the
prior written consent of each of the other parties hereto (which shall
not, if requested, be unreasonably withheld) save that Funding shall
be entitled to assign by way of security all or any of its rights
under this Agreement without such consent to the Security Trustee
pursuant to the Funding Deed of Charge and the Security Trustee may at
its sole discretion assign all or any of its rights under or in
respect of this Agreement without such consent to any successor
Security Trustee under the Funding Deed of Charge and may assign all
of any part of the Funding Security upon an enforcement of the Funding
Security in accordance with the Funding Deed of Charge.
15.2 Acknowledgement of Security Assignment: The Seller acknowledges that
on the assignment pursuant to the Funding Deed of Charge by Funding to
the Security Trustee of Funding's rights under this Agreement the
Security Trustee may enforce such rights in the Security Trustee's own
name without joining Funding in any such action (which right the
Seller hereby waives) and the Seller hereby waives as against the
Security Trustee any rights or equities in its favour arising from any
course of dealing between the Seller and Funding.
16. Security Trustee
16.1 Vesting of Rights: If there is any change in the identity of the
security trustee in accordance with the Funding Deed of Charge, the
Seller, the Mortgages Trustee and Funding shall execute such documents
and take such action as the successor security trustee and the
outgoing security trustee may require for the purpose of vesting in
the successor security trustee the rights and obligations of the
outgoing security trustee hereunder and releasing the outgoing
security trustee from its future obligations under this Agreement and
the Seller shall give notice thereof to the Rating Agencies.
16.2 No Assumption: It is hereby acknowledged and agreed that by its
execution of this Agreement the Security Trustee shall not assume or
have any of the obligations or liabilities of the Seller or Funding or
the Mortgages Trustee hereunder. Furthermore, any liberty or power
which may be exercised or any determination which may be made
hereunder by the Security Trustee may be exercised or made in the
Security Trustee's absolute discretion without any obligation to give
reasons therefor, but in any event must be exercised or made in
accordance with the provisions of the Funding Deed of Charge. Without
prejudice to the generality of the foregoing, all references to the
Security Trustee taking action in connection with any duty of the
Seller shall also be read subject to Clause 25 and Schedule 4 of the
Administration Agreement.
28
17. New Intercompany Loans
If Funding enters into a New Intercompany Loan Agreement, then the
Seller, the Mortgages Trustee, Funding and the Security Trustee shall
execute such documents and take such action as may be required by the
Rating Agencies for the purpose of including the New Issuer in the
Transaction including, without limitation:
(a) effecting any necessary changes to Clause 4 (Sale and Purchase
of New Mortgage Portfolios);
(b) ensuring that any Transaction Document relevant to a New
Issuer has been executed and delivered prior to the relevant
Closing Date;
(c) executing and delivering all documents required by Clause 4.4
(Closing and Conditions Precedent) in relation to any New
Mortgage Portfolio.
18. Non Petition Covenant; Limited Recourse
18.1 Non Petition Covenant: Each of the parties hereto hereby agrees that
it shall not institute against either Funding or the Mortgages Trustee
any winding-up, administration, insolvency or similar proceedings so
long as any sum is outstanding under any Intercompany Loan Agreement
of any Issuer or for two years plus one day since the last day on
which any such sum was outstanding.
18.2 Limited Recourse: Each of the parties hereto agrees that:
(a) in relation to the Mortgages Trustee, any amount payable by
the Mortgages Trustee to any other party to this Agreement
under this Agreement not being an amount payable out of the
Trust Property in accordance with the terms of the Mortgages
Trust Deed shall only be payable to the extent that on that
date the Mortgages Trustee has sufficient funds to pay such
amount out of fees paid to it under the Mortgages Trust Deed;
and
(b) in relation to Funding:
(i) only the Security Trustee may enforce the security
created in favour of the Security Trustee under the
Funding Deed of Charge in accordance with the
provisions thereof;
(ii) notwithstanding any other provision of this Agreement
or any other Transaction Document, no sum due or owing
to any party to this Agreement from or by Funding
under this Agreement shall be payable by Funding
except to the extent that Funding has sufficient funds
available or (following enforcement of the Funding
Security) the Security Trustee has realised sufficient
funds from the Funding Security to pay such sum
subject to and in accordance with the relevant Funding
Priority of Payments and provided that all liabilities
of Funding required to be paid in priority thereto or
pari passu
29
therewith pursuant to such Funding Priority of
Payments have been paid, discharged and/or otherwise
provided for in full; and
(iii) it shall not take any steps for the purpose of
recovering any amount payable by Funding or enforcing
any rights arising out of this Agreement against
Funding otherwise than in accordance with the Funding
Deed of Charge.
18.3 Corporate Obligations: To the extent permitted by law, no recourse
under any obligation, covenant, or agreement of any person contained
in this Agreement shall be had against any shareholder, officer or
director of such person as such, by the enforcement of any assessment
or by any legal proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this Agreement is a
corporate obligation of each person expressed to be a party hereto and
no personal liability shall attach to or be incurred by the
shareholders, officers, agents or directors of such person as such, or
any of them, under or by reason of any of the obligations, covenants
or agreements of such person contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by
such person of any of such obligations, covenants or agreements,
either under any applicable law or by statute or constitution, of
every such shareholder, officer, agent or director is hereby expressly
waived by each person expressed to be a party hereto as a condition of
and consideration for the execution of this Agreement.
19. Amendments and Waiver
19.1 Entire Agreement: This Agreement sets out the entire agreement and
understanding between the parties with respect to the subject matter
of this Agreement superseding all prior oral or written understandings
other than the other Transaction Documents.
19.2 Amendments and Waiver: No amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing
and signed by each of the parties hereto. In the case of a waiver or
consent, such waiver or consent shall be effective only in the
specific instance and as against the party or parties giving it for
the specific purpose for which it is given.
19.3 Rights cumulative: The respective rights of each of the parties to
this Agreement are cumulative and may be exercised as often as they
consider appropriate. No failure on the part of any party to exercise,
and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise
of any other right. The remedies in this Agreement are cumulative and
not exclusive of any remedies provided by law.
20. Notices
Any notices or other communication or document to be given or
delivered pursuant to this Agreement to any of the parties hereto
shall be sufficiently served if sent by prepaid first class post, by
hand or by facsimile transmission and shall be deemed to be given (in
the case of facsimile transmission) when despatched or (where
delivered by hand) on the day of delivery if delivered before 17.00
hours on a London Business
30
Day or on the next London Business Day if delivered thereafter or (in
the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
(a) in the case of the Seller, to Northern Rock plc, Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (facsimile number
0191 213 2203) for the attention of the Group Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance
Trustees Limited, 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0
0XX, Channel Islands, (facsimile number 01534-609-333) for the
attention of the Company Secretary;
(c) in the case of Funding, to Granite Finance Funding Limited, 0
Xxxxx Xxxx Xxxxx, Xxxxxx XX0X 0XX, (facsimile number
0207-332-6199) for the attention of the Company Secretary; and
(d) in the case of the Security Trustee, to The Bank of New York
(London Branch), at Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00
0XX (facsimile number 020-7964-6399) for the attention of
Corporate Trust (Global Structured Finance),
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by
any party to the others by fifteen days prior written notice in
accordance with the provisions of this Clause 20.
21. Third Party Rights
A person who is not a party to this Agreement may not enforce any of
its terms under the Contracts (Rights of Third Parties) Xxx 0000, but
this shall not affect any right or remedy of a third party which
exists or is available apart from that Act.
22. Execution in Counterparts; Severability
22.1 Counterparts: This Agreement may be executed in any number of
counterparts (manually or by facsimile) and by different parties
hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
22.2 Severability: Where any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations under this Agreement, or of such
provision or obligation in any other jurisdiction, shall not be
affected or impaired thereby.
23. Governing Law and Submission to Jurisdiction
23.1 Governing Law: This Agreement is governed by, and shall be construed
in accordance with, English law (PROVIDED THAT any terms of this
Agreement which are particular to the law of Scotland shall be
construed in accordance with Scots law).
23.2 Submission to Jurisdiction: Each of the parties hereto irrevocably
agrees that the courts of
31
England shall have jurisdiction to hear and determine any suit, action
or proceeding, and to settle any disputes, which may arise out of or
in connection with this Agreement and, for such purposes, irrevocably
submits to the jurisdiction of such courts.
24. Process Agent
The Mortgages Trustee irrevocably and unconditionally appoints Mourant
& Co. Capital (SPV) Limited at 0 Xxxxx Xxxx Xxxxx, Xxxxxx XX0X 0XX or
otherwise at its registered office for the time being as its agent for
service of process in England in respect of any proceedings in respect
of this Agreement and undertakes that in the event of Mourant & Co.
Capital (SPV) Limited ceasing so to act it will appoint another person
with a registered office in London as its agent for service of
process.
25. Appropriate Forum
Each of the parties hereto irrevocably waives any objection which it
might now or hereafter have to the courts of England being nominated
as the forum to hear and determine any Proceedings and to settle any
disputes, and agrees not to claim that any such court is not a
convenient or appropriate forum.
32
26. Transaction Documents
To the extent necessary to comply with the requirements of Section 2
Law of Property (Miscellaneous Provisions) Xxx 0000, this Agreement
incorporates by reference to them the Transaction Documents.
AS WITNESS whereof the parties hereto have executed this Agreement for
delivery on the day and year first before written.
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
____________________________________
Authorised Signatory
Title:_____________________
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
____________________________________
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
____________________________________
Authorised Signatory
Name:
Title:
33
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
____________________________________
Authorised Signatory
Name:
Title:
34
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
Part 1
1. The particulars of each Mortgage Loan and its related Mortgage in the
Initial Mortgage Portfolio set out in Appendix A to this Agreement are
complete, true and accurate in all material respects.
2. Immediately prior to a Closing Date or an Assignment Date, as the case
may be, subject to completion of any registration or recording which
may be pending at H.M. Land Registry or the Registers of Scotland, the
Seller was the absolute beneficial and legal owner of the Mortgages,
the Related Security and the other property to be assigned and
transferred by the Seller to the Mortgages Trustee under this
Agreement at such Closing Date or such Assignment Date, as the case
may be, and the Seller has not assigned (whether by way of absolute
assignment or by way of security only), transferred, charged, disposed
of or dealt with the benefit of any of the Mortgage Loans or their
related Mortgages, any of the other rights relating thereto or any of
the property, rights, titles, interests or benefits to be sold or
assigned pursuant to this Agreement other than pursuant to this
Agreement.
3. Each Mortgage Loan and its related Mortgage and the Related Security
constitutes a valid and binding obligation of the Borrower enforceable
in accordance with its terms (save any terms which are not binding by
virtue of the Unfair Terms in Consumer Contracts Regulations 1994 or
the Unfair Terms in Consumer Contracts Regulations 1999) and each
related Mortgage and the Related Security secures the repayment of all
advances, interest, costs and expenses payable by the relevant
Borrower to the Seller in priority to any other charges registered
against the relevant Mortgaged Property.
4. At the time that it was made, each Mortgage Loan complied in all
respects with applicable laws and regulations including, without
limitation, consumer protection, data protection and contract law.
5. Subject to completion of any registration which may be pending at H.M.
Land Registry or the Registers of Scotland, (i) each Mortgage (other
than a Mortgage in respect of a Personal Secured Loan) either
constitutes, or will constitute, following registration at H.M. Land
Registry (in England and Wales), a first ranking charge by way of
legal mortgage or following registration or recording at the Registers
in Scotland, a first ranking standard security over the relevant
Mortgaged Property; and (ii) in relation to each Mortgage in respect
of a Personal Secured Loan, either constitutes, or will constitute,
following registration at H.M. Land Registry (in England and Wales), a
second ranking charge by way of legal mortgage or following
registration or recording at the Registers in Scotland, a second
ranking standard security over the relevant Mortgaged Property.
6. Each relevant Mortgaged Property is located in England, Wales or
Scotland.
35
7. All steps necessary to perfect the Seller's title to each Mortgage
Loan and its related Mortgage were duly taken at the appropriate time
or are in the process of being taken with all due diligence.
8. No lien or right of set-off or counterclaim (other than a Right of
Set-off referred to in Clause 8.15 (Indemnity)) has been created or
arisen between the Seller and any Borrower which would entitle such
Borrower to reduce the amount of any payment otherwise due under the
relevant Mortgage Loan save in relation to the Unfair Terms in
Consumer Contracts Regulations 1994 or the Unfair Terms in Consumer
Contracts Regulations 1999 and save in relation to section 75 of the
Consumer Credit Xxx 0000.
9. Prior to making a Mortgage Loan to a Borrower, the Seller instructed
or required to be instructed on its behalf solicitors to carry out in
relation to the relevant Mortgaged Property all investigations,
searches and other actions that would have been undertaken by the
Seller acting in accordance with standards consistent with those of a
reasonable and prudent mortgage lender, lending to Borrowers in
England and Wales (in respect of English Mortgage Loans) and Scotland
(in respect of Scottish Mortgage Loans), when advancing money in an
amount equal to such advance to an individual to be secured on a
mortgaged property of the kind permitted under the Lending Criteria
and a report on title was received by or on behalf of the Seller from
such solicitors which, either initially or after further investigation
revealed no material matter which would cause the Seller, acting
reasonably, to decline the Mortgage Loan having regard to the Lending
Criteria.
10. In relation to each Mortgage the Borrower has a good and marketable
title to the relevant Mortgaged Property.
11. Prior to making a Mortgage Loan the relevant Mortgaged Property was
valued by an independent valuer from the panel of valuers from time to
time appointed by the Seller or by an employee valuer of the Seller,
and the results of such valuation would be acceptable to a reasonable
and prudent mortgage lender.
12. Prior to making a Mortgage Loan, the nature and amount of such
Mortgage Loan, the circumstances of the relevant Borrower and nature
of the relevant Mortgaged Property satisfied the Lending Criteria in
force at that time in all material respects.
13. The exercise of any discretion by the Seller in the making of any
Mortgage Loan has been consistent with the practice of a reasonable
and prudent mortgage lender.
14. Each Mortgage Loan and its related Mortgage has been made on the terms
of the Standard Mortgage Documentation (so far as applicable) which
has not been varied in any material respect, save for the making of
the Base Rate Pledge.
15. With the exception of agreements for Personal Secured Loans, no
agreement for any Mortgage Loan (other than to the extent it relates
to the funding of buildings insurance premiums) is or has ever been,
wholly or partly regulated by the Consumer Credit Xxx 0000 (other than
by Sections 137 to 140 of such Act) or constitutes an extortionate
credit bargain
36
under Sections 137 to 140 of such Act or, to the extent it is so
regulated or partly regulated, all the requirements of the Consumer
Credit Act have been met in full.
16. Interest on each Mortgage Loan: (a) is charged on each Mortgage Loan
in accordance with the provisions of that Mortgage Loan and its
related Mortgage; (b) is not in any event adjusted by reference to the
principal amount due thereunder; (c) is payable monthly in advance;
and (d) is calculated by reference to the Standard Variable Rate,
subject to any applicable caps, discounts and fixed rates and the Base
Rate Pledge; and (e) subject to (d) above, may be set by the Seller
and its successors and assigns to that Mortgage Loan.
17. No payment of interest (or in the case of Repayment Mortgage Loans,
principal and interest) equivalent to an amount in excess of one
month's instalment at the applicable rate in respect of a Mortgage
Loan in the Initial Mortgage Portfolio was at any time during the 12
months before the relevant Closing Date or Assignment Date, as the
case may be, in arrears.
18. So far as the Seller is aware, no Borrower is in material breach of
its Mortgage.
19. So far as the Seller is aware, the underwriting, origination and
completion of each Mortgage Loan is not the subject of fraud by any
person (including, without limitation, the Borrower or any
professional or third party employed or engaged on behalf of the
Seller).
20. As at the date of this Agreement, the first payment due has been paid
by the relevant Borrower in respect of each Mortgage Loan and each
Mortgage Loan was fully performing.
21. Where any Borrower is or was entitled to repayment of any early
repayment charge in respect of any mortgage previously held by the
Borrower with the Seller, that repayment has been or will be made by
the Seller.
22. Except where a Mortgaged Property was at completion of the relevant
Mortgage (or, where appropriate, in the case of self-build properties,
at the date of completion of the relevant mortgaged property) covered
by the Block Buildings Policy or a block buildings policy providing
equivalent cover, the Seller took all reasonable steps to ensure that
at the date of completion of the relevant Mortgage Loan each Mortgaged
Property was:
(a) insured under a buildings policy either (i) in the joint names
of the Borrower and the Seller or (ii) with the interest of
the Seller noted thereon;
(b) insured under a Block Buildings Policy; or
(c) with respect to leasehold properties, insured by the relevant
landlord with the Seller's approval,
and in all cases against risks usually covered by a comprehensive
buildings policy and to an amount not less than the full reinstatement
cost of such Mortgaged Property as determined by an independent valuer
or a valuer employed by the Seller.
23. The Block Buildings Policy referred to above covers such fire and
other commercial risks as would be required by the Seller acting in
accordance with its normal standard for an amount
37
not less than the full reinstatement value of the Properties covered
by the Block Buildings Policy.
24. The Insurance Contracts are in full force and effect and all premiums
thereon due on or before the date of this Agreement have been paid in
full and the Seller is not aware of any circumstances giving the
insurer under the Insurance Contracts the right to avoid or terminate
such policy in so far as it relates to the Mortgaged Properties or the
Mortgage Loans. Where the Lending Criteria then in force required that
a Mortgage Loan was covered by the Insurance Contract referred to in
paragraph 1 of Schedule 4 (Insurance Contracts), that Mortgage Loan is
covered by such Insurance Contract.
25. To the extent that a Guarantee was required under the Lending Criteria
in relation to a particular Mortgage Loan, that Guarantee constitutes
the valid, binding and enforceable obligations of the guarantor
thereunder (save to the extent that the Guarantee is not valid,
binding or enforceable by virtue of the Unfair Terms in Consumer
Contracts Regulations 1994 or the Unfair Terms in Consumer Contracts
Regulations 1999).
26. If a Mortgaged Property is leasehold or long leasehold, written notice
has been given to the landlord of the creation of the Mortgage.
27. In relation to each English Mortgage, any person who at the date when
the Mortgage Loan was made has been identified by the Borrower to the
Seller as residing or about to reside in the relevant Mortgaged
Property is either named as a joint Borrower or has signed a form of
consent declaring that he or she agrees that any present or future
rights or interests as he or she may have or acquire over or in
respect of the relevant Mortgaged Property shall be postponed and made
subject to the rights, interests and remedies of the Seller under the
relevant Mortgage and that he or she shall not claim any such rights
or interests against the Seller. In relation to each Scottish
Mortgage, all necessary MHA Documentation has been obtained to as to
ensure that neither the relevant Mortgage nor the relevant Mortgaged
Property is subject to or affected by any statutory right of
occupancy.
28. No Borrower was under 18 years of age at the time of completion of the
relevant Mortgage Loan.
29. No Mortgage Loan has a final maturity beyond January 2039.
30. The Seller has procured that full and proper accounts, books and
records have been kept showing clearly all material transactions,
payments, receipts and proceedings relating to that Mortgage Loan and
its Mortgage and all such accounts, books and records are up to date
and in the possession of the Seller or held to its order (subject to
the provisions of the Mortgages Trust Deed).
31. The origination and collection practices employed by the Seller with
respect to the Mortgage Loans have been, in all respects, legal and
consistent with the practice of a reasonable and prudent mortgage
lender.
32. The Seller has not received written notice of any litigation or claim
calling into question in any material way its title to any Mortgage
Loan and its Mortgage or the value of any security.
38
The Seller is not engaged in any litigation, and no litigation is
pending or threatened by the Seller, against any person in connection
with any report, valuation, opinion, certificate, consent or other
statement of fact or opinion given in connection with any Mortgage
Loan received by the Seller in connection with the origination of any
Mortgage Loan.
33. In respect of any Mortgaged Property which is subject to a second or
subsequent mortgage or standard security, the Seller has first
priority for the full amount of the Mortgage Loan (other than a
Personal Secured Loan) and all costs, fees and expenses relative
thereto.
34. Subject to completion of any registration or recording which may be
pending at the H.M. Land Registry or the Registers of Scotland, all
Property Deeds and Mortgage Loan Files are held by, or to the order
of, the Seller.
35. Each Borrower is a natural person, and no Borrower is at present an
employee or an officer of the Seller.
36. All Mortgage Loans were originated by or on behalf of the Seller in
the ordinary course of the Seller's residential secured lending
activities. No Mortgage Loan was acquired by the Seller subject to any
discount and no Mortgage Loan has been written down by the Seller in
its accounts.
37. The Mortgage Loans and their related Mortgages contain no obligations
on the part of the Seller to make any further advances, and all costs,
fees and expenses incurred in making, closing or registering the
Mortgage Loans and the Related Security have been paid in full.
38. All formal approvals, consents and other steps necessary to permit a
legal or equitable or beneficial transfer or a transfer of servicing
away from the Seller of the Mortgage Loans and their related Mortgages
to be sold under this Agreement whenever required under the
Transaction Documents have been obtained or taken and there is no
requirement in order for the transfer to be effective to notify the
Borrower before, on or after any equitable or beneficial transfer or
before any legal transfer of the Mortgage Loans and their related
Mortgages.
39. So far as the Seller is aware, none of the terms in any Mortgage Loan
and its related Mortgage are unfair terms within the meaning of the
Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair
Terms in Consumer Contracts Regulations 1999 in any material respect
save those which impose Early Repayment Charges.
40. The Seller has confirmed to all relevant Borrowers that where any
Mortgage Loan provides that where any Early Repayment Charge is
payable at any time when the interest rate payable under that Mortgage
Loan is equal to or set by reference to the Standard Variable Rate
(including without limitation where the Mortgage Loan provides for a
capped or discounted rate), the interest rate payable under that
Mortgage Loan will be no more than 1.99 per cent. above the Bank of
England's base rate.
39
41. In relation to a Right to Buy Mortgage Loan:
(a) in the case of each English Mortgage Loan the Seller was at
the time of origination of that Mortgage Loan an approved
lending institution within the meaning given to that
expression in the Housing Xxx 0000;
(b) the original advance was made to the person exercising the
right to buy; and
(c) the original advance was made for the purposes of enabling the
recipient thereof to purchase the relevant Mortgaged Property.
For the purpose of this paragraph 41, "Right to Buy Mortgage Loan"
means (i) in relation to an English Mortgage Loan, a Mortgage Loan in
respect of which the "right to buy" provisions of the Housing Xxx 0000
apply (other than any Mortgage Loan in respect of which the period
during which the statutory charge referred to in section 156 of that
Act would have existed, had the relevant circumstances applied, has
expired) and (ii) in relation to a Scottish Mortgage Loan, a Mortgage
Loan in respect of which the "right to buy" provisions of the Housing
(Scotland) Xxx 0000 apply (other than any Mortgage Loan in respect of
which the period during which the seller's standard security referred
to in section 72 of that Act remains in effect has expired).
42. The loyalty discount applicable to certain Mortgage Loans after seven
years will not apply to any such Mortgage Loans during any period when
the interest rate is fixed.
43. The Seller has paid to the relevant Borrower the full amount of the
cashback payment in relation to any Cashback Mortgage Loan, either
upon completion of the relevant Mortgage Loan or, if subsequent to
completion, prior to the assignment of such Mortgage Loan to the
Mortgages Trustee.
44. No Mortgage Loan has a Current Balance of more than (GBP)500,000.
45. Each English Mortgage Loan and its Related Security in the Mortgage
Portfolio was made not earlier than 1 July 1995 and each Scottish
Mortgage Loan and its Related Security in the Mortgage Portfolio was
made not earlier than 1 July 2001.
46. Each Mortgage Loan was originated by the Seller in pounds sterling and
is denominated in pounds sterling (or originated and denominated in
euro at any time when the euro has been adopted as the lawful currency
of the United Kingdom) and is currently repayable in pounds sterling.
47. The Seller's Lending Criteria are consistent with the criteria that
would be used by a reasonable and prudent mortgage lender.
48. The Seller is not aware of any material claim outstanding under any of
the Buildings Policies relating to a Mortgaged Property.
49. No Mortgage Loan has an LTV greater than 95 per cent. In relation to
Personal Secured Loans, the combined LTV of the maximum amount of
credit provided under a Personal
40
Secured Loan and the other Mortgage Loans secured on the same property
is not greater than 95 per cent.
50. Each Mortgage Loan (other than a Personal Secured Loan) has been made
for one of the following purposes:
(a) the purchase of land; or
(b) the provisions of dwellings or business premises on any land;
or
(c) the alteration, enlarging, repair or improvement of a dwelling
or business premises on any land provided the creditor is the
creditor under (i) an agreement by which the debtor is
provided with credit for any of the purposes in (a) or (b)
above or (ii) an agreement refinancing an agreement under
which the debtor is provided with credit for any of the
purposes in (a) or (b) above; or (iii) a debtor-creditor
agreement secured by any land mortgage or standard security to
refinance any existing indebtedness of the debtor, whether to
the creditor or another person, under any agreement by which
the debtor was provided with credit for any of the purposes in
(a) and (b) above.
Any reference in this Schedule 1 to solicitors includes licensed or qualified
conveyancers.
41
Part 2
1. In respect of each of the Preliminary Prospectus as of its date
(except insofar as the information contained therein has been amended,
supplemented or deleted in the Prospectus) and the Prospectus as at
the date thereof:
(a) each of them contained all information with respect to the
Seller, the Initial Mortgage Portfolio and to the Notes which
was material in the context of the issue and offering of the
Notes (including all information required by English law);
(b) the statements contained in each of them relating to the
Seller and the Initial Mortgage Portfolio were in every
material particular true and accurate and not misleading;
(c) the opinions and intentions expressed in each of them with
regard to the Seller and the Initial Mortgage Portfolio were
honestly held, were reached after considering all relevant
circumstances and were based on reasonable assumptions;
(d) there were no other facts in relation to the Seller, the
Initial Mortgage Portfolio or the Notes the omission of which
would, in the context of the issue and offering of the Notes,
make any statement in either of them misleading; and
(e) all reasonable enquiries had been made by the Seller to
ascertain such facts and to verify the accuracy of all such
information and statements.
2. The Seller has not acquired or owned or possessed any rights in the
Mortgages Trustee or Funding such that it would "control" the
Mortgages Trustee or Funding within the meaning of section 416 ICTA
1988.
There is not any "connection" (within the meaning of section 87
Finance Act 1996) between either the Mortgages Trustee or Funding,
respectively, and any Borrower.
42
Part 3
The Seller makes the following representations and warranties to each of the
Mortgages Trustee, Funding and the Security Trustee:
1. Status: It is a public limited company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which it
is incorporated, capable of being sued in its own right and not
subject to any immunity from any proceedings, and it has the power to
own its property and assets and to carry on its business as it is
being conducted.
2. Powers and authority: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of each of the
Transaction Documents to which it is or will be a party, and each such
Transaction Document has been duly executed and delivered by it.
3. Legal validity: Each Transaction Document to which it is or will be a
party constitutes or when executed in accordance with its terms will
constitute its legal, valid and binding obligation.
4. Non-conflict: The execution by it of each of the Transaction Documents
to which it is a party and the exercise by it of its rights and the
performance of its obligations under such Transaction Documents will
not:
(a) result in the existence or imposition of, nor oblige it to
create, any Security Interest in favour of any person over all
or any of its present or future revenues or assets save for
any which are created under or pursuant to the Funding Deed of
Charge;
(b) conflict with any document which is binding upon it or any of
its assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial
order of any government, governmental body or court, domestic
or foreign, having jurisdiction over it.
5. No litigation: It is not a party to any material litigation,
arbitration or administrative proceedings and, to its knowledge, no
material litigation, arbitration or administrative proceedings are
pending or threatened against it.
6. Consents and Licences: All governmental consents, licences and other
approvals and authorisations required in connection with the entry
into, performance, validity and enforceability of, and the
transactions contemplated by, the Transaction Documents have been
obtained or effected (as appropriate) and are in full force and
effect.
43
SCHEDULE 2
FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND
AND SCOTTISH TRANSFERS
Part 1
FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)
In the form of H.M. Land Registry Form TR4
44
Part 2
FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)
This Transfer of Mortgages is made on [ ] between NORTHERN ROCK PLC
(registered number 3273685) whose registered office is at Xxxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (hereinafter called the "Transferor") of
the one part and GRANITE FINANCE TRUSTEES LIMITED (registered number 79309)
whose registered office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX,
Channel Islands (hereinafter called the "Transferee") of the other part.
WHEREAS:
(A) By the charges by way of legal mortgage ("Mortgages") brief
particulars of which are set out in the Annexure hereto the properties
brief particulars of which are similarly set out ("Properties") became
security for the repayment of the moneys therein mentioned.
(B) By a mortgage sale agreement dated 26 March 2001 made between inter
alios the Transferor and the Transferee (as amended, restated, varied,
supplemented or novated from time to time), the Transferor has agreed
to sell and the Transferee has agreed to buy all right, title,
interest and benefit (both present and future) in and under the
Mortgages for the consideration hereinafter mentioned.
NOW THIS DEED WITNESSETH as follows:
1. In consideration of the sums payable and the other consideration under
the Agreement by the Transferee (receipt of which is hereby
acknowledged) the Transferor with full title guarantee hereby
transfers unto the Transferee all right, title, interest and benefit
(both present and future) in and under the Mortgages including for the
avoidance of doubt:
(i) the right to demand, xxx for, recover, receive and give
receipts for all principal moneys payable or to become payable
under the Mortgages or the unpaid part thereof and the
interest due or to become due thereon; and
(ii) the benefit of all securities for such principal moneys and
interest, the benefit of all consents to mortgage signed by
occupiers of the Properties, and the benefit of and the right
to xxx on all covenants with the Transferor in each Mortgage
and the right to exercise all powers of the Transferor in
relation to each Mortgage; and
(iii) all the estate and interest in the Properties vested in the
Transferor subject to redemption or cesser; and
(iv) all causes of action of the Transferor against any person in
connection with any report, valuation, opinion, certificate or
other statement of fact or opinion or consent to mortgage
given in connection with any Mortgage or affecting the
Transferor's decision to make the relevant advance.
45
IN WITNESS of which NORTHERN ROCK PLC has caused this Transfer to be executed
and delivered as a deed on the date which appears first above.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
____________________________________
Authorised Signatory
Name:
Title:
____________________________________
Authorised Signatory
Name:
Title:
[Alternative methods of executing as a deed will be acceptable if effective]
46
Part 3
FORM OF TRANSFER (LAND REGISTER - SCOTLAND)
We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 00 Xxxxxxxxx Xxxxxx, Xx Xxxxxx,
Xxxxxx XX0 0XX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
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 pro tanto 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 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:
1 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 all sums now due and which may at any
time or times hereafter become due under the said 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
2 the whole rights 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, together with
all sums, present and future, due thereunder and all other rights,
interests and benefits pertaining thereto:
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 the said
NORTHERN ROCK PLC
by .................................. ....................................
and ................................. ....................................
47
Schedule referred to in the foregoing Assignation by
Northern Rock plc
in favour of GRANITE FINANCE TRUSTEES LIMITED
1 2 3 4 5
Account No. Address Borrowers Full Names Title Number Registration Date
48
Part 4
FORM OF TRANSFER (SASINE REGISTER - SCOTLAND)
We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 00 Xxxxxxxxx Xxxxxx, Xx Xxxxxx,
Xxxxxx XX0 0XX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
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 pro tanto 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 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:
1 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 all sums now due and which may at any
time or times hereafter become due under the said 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
2 the whole rights 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, together with
all sums, present and future, due thereunder and all other rights,
interests and benefits pertaining thereto:
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 the said
NORTHERN ROCK PLC
by .................................. ....................................
and ................................. ....................................
REGISTER on behalf of the within named GRANITE FINANCE TRUSTEES LIMITED as
trustee within mentioned in the REGISTERS of the COUNTIES of [ ]
49
Schedule referred to in the foregoing Assignation by Northern Rock PLC
in favour of Granite Finance Trustees Limited
1 2 3 4 5
Account No. Address Borrowers Full Names County Recording Date
50
Schedule referred to in the foregoing Transfer by
Northern Rock plc
in favour of GRANITE FINANCE TRUSTEES LIMITED
1 2 3 4
Account No. Property Address Name(s) Date of
Mortgage
Completion
51
SCHEDULE 3
ASSIGNMENT OF INSURANCE CONTRACTS
THIS ASSIGNMENT is made by way of deed on [ ]
BETWEEN
NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX ("Northern Rock");
and
GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel Islands
(the "Mortgages Trustee")
WHEREAS
(A) By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time "Mortgage Sale Agreement")
and made between Northern Rock, as Seller, the Mortgages Trustee,
Granite Finance Funding Limited ("Funding") and The Bank of New York,
as security trustee (the "Security Trustee"), certain mortgages and
standard securities and the loans secured thereby (the "Mortgages")
were agreed to be transferred to the Mortgages Trustee.
(B) Northern Rock has the benefit of the Insurance Contracts, as defined
in the Master Definitions Schedule dated 26 March 2001 (as amended,
varied, supplemented or novated from time to time) which relate to the
Mortgages and the mortgaged properties upon which they are secured
(the "Mortgaged Properties") as well as to certain mortgages and
properties in which the Mortgages Trustee have no interest.
(C) This Assignment is supplemental to the Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee absolutely all the estate and interest in
the Insurance Contracts including the rights to receive the proceeds of any
claim to the extent only that such estate, interest, and rights relate to the
Properties and/or the Mortgages, to hold the same unto the Mortgages Trustee
absolutely.
52
IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a Deed or the date which first appears above.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
____________________________________
Authorised Signatory
Name:
Title:
____________________________________
Authorised Signatory
Name:
Title:
53
SCHEDULE 4
INSURANCE CONTRACTS
Policy number Insurer Policy name/type Date of Policy
1. NR 9501 Northern Rock Mortgage Mortgage Indemnity 18.07.1996
Indemnity Company Limited
2.(a)BL-HHS AXA General Insurance Supercover Buildings 01.01.1997
Limited and Contents
(b)DR-FHH AXA General Insurance Superchoice 01.01.1997
Limited Buildings and
Contents
(c)DR-SGD AXA General Insurance Supercover Gold 01.11.1999
Limited Buildings and
Contents
(d)AG112/Z1413248 AXA General Insurance Contingency Insurance 18.10.1999
Limited
(e)AG112/Z1413256 AXA General Insurance Properties in 18.10.1999
Limited Possession
(f)BL-BBR AXA General Insurance Cover Me Buildings 18.12.2000
Limited and Contents
54
SCHEDULE 5
Part 1
ASSIGNMENT OF GUARANTEES
THIS ASSIGNMENT is made by way of deed on [ ]
BETWEEN:
NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX ("Northern Rock");
and
GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel Islands
(the "Mortgages Trustee")
WHEREAS:
(A) By a mortgage sale agreement dated 26 March 2001 ( as amended, varied,
supplemented or novated from time to time the "Mortgage Sale
Agreement") and made between Northern Rock, the Mortgages Trustee,
Granite Finance Funding Limited and The Bank of New York, certain
mortgages (the "Mortgages") were agreed to be transferred and assigned
to the Mortgages Trustee.
(B) Northern Rock has the benefit of the Guarantees as defined in the
Master Definitions Agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to certain of
the Mortgages.
(C) This Assignment is made pursuant to the Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee all its right, title, interest and benefit
(both present and future) in the Guarantees relating to the Mortgages the
subject of a Transfer of even date herewith including for the avoidance of
doubt:
(i) the benefit of and the right to xxx on all covenants with and
undertakings to Northern Rock in each Guarantee and the right to
exercise all powers of Northern Rock in relation to each Guarantee;
and
(ii) all the estate and interest in the Guarantees vested in Northern Rock;
to hold the same unto the Mortgages Trustee absolutely.
IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a deed on the date which first appears above.
55
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
____________________________________
Authorised Signatory
Name:
Title:
____________________________________
Authorised Signatory
Name:
Title:
[Alternative methods of executing as a deed will be acceptable if effective]
56
Part 2
ASSIGNATION OF GUARANTEES
ASSIGNATION
by
NORTHERN ROCK PLC, incorporated in England (Registered Number 3273685) whose
Registered Office is at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0
0XX (Northern Rock);
in favour of
GRANITE FINANCE TRUSTEES LIMITED, incorporated in Jersey (Registered Number
79309) whose Registered Office is at 00 Xxxxxxxxx Xxxxxx, Xx Xxxxxx, Xxxxxx
XX0 0XX, Channel Islands
(the "Mortgages Trustee")
WHEREAS:
(A) By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time, the "Mortgage Sale
Agreement") and made between Northern Rock, the Mortgages Trustee,
Granite Finance Funding Limited and The Bank of New York, certain
mortgage loans and their related security (the "Mortgages") were
agreed to be transferred and assigned to the Mortgages Trustee;
(B) Northern Rock has the benefit of the Guarantees as defined in the
Master Definitions Agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to certain of
the Mortgages;
(C) This Assignation is made pursuant to the Mortgage Sale Agreement;
NOW THEREFORE the parties hereby AGREE as follows:
1 Assignation
Northern Rock hereby assigns to the Mortgage Trustee with absolute
warrandice its whole right, title, benefit and interest, present and
future, in and to the Guarantees governed by Scots law and detailed in
the Schedule hereto (the "Scottish Guarantees") relating to the
Mortgages including for the avoidance of doubt the benefit of and the
right to xxx on all obligations and undertakings to Northern Rock in
each Scottish Guarantee and the right to exercise all powers of
Northern Rock in relation to each Scottish Guarantee.
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2 Intimation
Northern Rock hereby undertakes to the Mortgages Trustee that it will,
within fourteen days of the execution of this deed, serve a notice of
assignation by recorded delivery post in such form as the Mortgage
Trustee shall approve upon each of the Guarantors pursuant to each
Scottish Guarantee.
3 Governing Law
This deed shall be governed by Scots law and the parties hereto submit
to the non-exclusive jurisdiction of the Scottish courts.
IN WITNESS WHEREOF these presents consisting of this and the preceding page
together with the Schedule annexed hereto are executed as follows:
SUBSCRIBED for and on behalf of the said
NORTHERN ROCK PLC
at .................................. ...................................
on .................................. ...................................
by ..................................
and .................................
SUBSCRIBED for and on behalf of the said
GRANITE FINANCE TRUSTEES LIMITED
at .................................. ...................................
on .................................. ...................................
by ..................................
and .................................
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Schedule referred to in the foregoing Assignation of
Guarantees by Northern Rock PLC
in favour of Granite Finance Trustees Limited
[Details of Guarantees]
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SCHEDULE 6
NEW MORTGAGE PORTFOLIO NOTICE
Dated [ ]
1. It is hereby agreed for the purpose of this notice the "Principal
Agreement" shall mean the Mortgage Sale Agreement dated 26 March 2001
made between (1) NORTHERN ROCK PLC (the "Seller"), (2) GRANITE FINANCE
TRUSTEES LIMITED (the "Mortgages Trustee") (3) GRANITE FINANCE FUNDING
LIMITED ("Funding") and (4) THE BANK OF NEW YORK (the "Security
Trustee"), as the same may be amended, varied, supplemented or novated
from time to time.
2. Save where the context otherwise requires, words and expressions in
this notice shall have the same meanings respectively as when used in
the Principal Agreement.
3. In accordance with and subject to Clause 4.1 (Agreement to Assign) of
the Principal Agreement, upon receipt by the Seller of the duplicate
of this notice signed by the Mortgages Trustee, there shall exist
between the Seller and the Mortgages Trustee an agreement (the
"Agreement for Sale") for the sale and assignment by the Seller to the
Mortgages Trustee of the New Mortgage Loans and the Related Security
more particularly described in the Schedule hereto (other than any New
Mortgage Loans and their Related Security which have been redeemed in
full prior to the next following Assignment Date). Completion of such
sale shall take place, subject to the provisions of the Principal
Agreement, on [ ] (the "Assignment Date").
4. The Seller hereby confirms that the conditions required to be
fulfilled pursuant to Clause 4.2 (Conditions to Effecting an
Assignment of New Mortgage Loans) of the Principal Agreement have been
fulfilled [/save for conditions ( ) ( ) and ( )]
5. The Agreement for Sale shall incorporate, mutatis mutandis, the
relevant provisions of the Principal Agreement.
Signed for and on behalf of )
NORTHERN ROCK PLC )
by: )
_____________________________
[On duplicate
We hereby acknowledge receipt of the New Mortgage Portfolio Notice dated
[ ], and confirm [that the conditions set out in paragraph ( ) ( ) and ( )
of Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage Loans) have
been waived and] the sale and assignment of the New Mortgage Loans as set out
in that notice.
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Signed for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
____________________________________]
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Schedule
1 2 3 4
Account No. Property Address Name(s) Date of
Mortgage
Completion
62
SCHEDULE 7
LOAN REPURCHASE NOTICE
Dated [ ]
1. We refer to the Mortgage Sale Agreement dated 26 March 2001 (as
amended, varied, supplemented or novated from time to time the
"Principal Agreement") made between (1) NORTHERN ROCK PLC (the
"Seller"), (2) GRANITE FINANCE TRUSTEES LIMITED (the "Mortgages
Trustee") (3) GRANITE FINANCE FUNDING LIMITED ("Funding") and (4) THE
BANK OF NEW YORK (the "Security Trustee").
2. Save where the context otherwise requires, words and expressions in
this notice shall have the same meanings respectively as when used in
the Principal Agreement.
3. We hereby send this notice pursuant to and in accordance with Clause
[8.4 (Repurchase)/8.5 (Purchase of Product Switches, Further Advances
and purchases relating to Personal Secured Loans)]* of the Principal
Agreement, upon receipt of which you as [the Seller/the Mortgages
Trustee]* will be required to [repurchase from us/re-sell to
us/purchase from us/sell to us]* the Mortgage Loan(s) and Related
Security set out in the attached schedule in accordance with the terms
of Clause 8 (Repurchase) of the Principal Agreement on [insert date].
Signed for and on behalf of )
[GRANITE FINANCE TRUSTEES )
LIMITED/NORTHERN ROCK PLC] )
by: )
____________________________________
* Delete as appropriate
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Schedule
1 2 3 4
Account No. Property Address Name(s) Date of
Mortgage
Completion
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SCHEDULE 8
FORM OF NOTIFICATION TO BORROWERS
[To: Borrower]
Dear Sirs,
Northern Rock
Account No.[ ]
We hereby notify you that on [ ] 2001, Northern Rock agreed to sell
your mortgage to Granite Finance Trustees Limited.
[Additional text will be allowed with Mortgages Trustee's and Security
Trustee's consent]
Yours faithfully,
Northern Rock plc
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SCHEDULE 9
OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE LOANS)
To: Northern Rock plc
Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
From: Granite Finance Trustees Limited
00 Xxxxxxxxx Xxxxxx
Xx Xxxxxx
Xxxxxx
Xxxxxxx Xxxxxxx
XX0 0XX
Date: [ ]
Pursuant to Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans) of the
mortgage sale agreement dated 26 March 2001 made between (1) Northern Rock
plc, (2) Granite Finance Funding Limited, (3) Granite Finance Trustees Limited
and (4) The Bank of New York (as amended, varied, supplemented or novated from
time to time the "Agreement") we hereby offer to re-sell to you the Mortgage
Loan(s) together with their Related Security, details of which are set out in
the attached print out, if such Mortgage Loan(s) become Re-Fixed Mortgage
Loans within 3 months of the expiry of the relevant initial fixed rate periods
applicable to that/those Mortgage Loans. If you wish to do so, please accept
this offer by payment to us of the consideration for the repurchase of the
relevant Mortgage Loan(s) and Related Security in accordance with Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans) of the Agreement if such Mortgage
Loan(s) become Re-Fixed Mortgage Loans within 3 months of the expiry of the
relevant initial fixed rate periods applicable to that/those Mortgage Loans.
Capitalised terms used in this notice and not defined herein have the meanings
given to them in the Agreement.
Signed by or on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
as Seller )
[acting as its attorney NORTHERN ROCK PLC:] )
____________________________________
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SCHEDULE 10
POWER OF ATTORNEY IN FAVOUR OF
THE MORTGAGES TRUSTEE, FUNDING AND THE SECURITY TRUSTEE
THIS DEED OF POWER OF ATTORNEY is made on the [o] by:
(1) NORTHERN ROCK PLC whose registered office is at Xxxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (registered number 3273685) in
its capacity as Seller,
in favour of each of:
(2) GRANITE FINANCE TRUSTEES LIMITED whose registered office is at 00
Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel Islands
(registered number 79309) in its capacity as Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED, acting out of its branch office
established in England (registered overseas company number FC022999
and branch number BR005916) at 0 Xxxxx Xxxx Xxxxx, Xxxxxx XX0X 0XX and
(4) THE BANK OF NEW YORK a New York Banking Corporation whose London
branch address is at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX in
its capacity as Security Trustee.
WHEREAS:
(A) By virtue of a mortgage sale agreement (the "Mortgage Sale Agreement")
dated 26 March 2001 and as subsequently amended, and made between (1)
the Seller, (2) the Mortgages Trustee (3) Funding and (4) the Security
Trustee, provision was made for the execution by the Seller of this
Power of Attorney.
(B) The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule [ ] Amendment and Restatement Deed made on [ ] between, among
others, the Seller, Funding and the Mortgages Trustee (as the same
have been and may be amended, varied or supplemented from time to time
with the consent of the parties hereto) are expressly and specifically
incorporated into and shall apply to this Deed.
NOW THIS DEED WITNESSETH:
1. The Seller irrevocably and by way of security for the performance of
the covenants, conditions and undertakings on the part of the Seller
contained in the Mortgage Sale Agreement and the Administration
Agreement HEREBY APPOINTS each of Funding, the Mortgages Trustee and
the Security Trustee (each an "Attorney") and any receiver and/or
administrator appointed from time to time in respect of Funding and/or
the Mortgages Trustee or their assets severally to be its true and
lawful attorney for the Seller and in the Seller's name or otherwise
to do any act, matter or thing which any Attorney considers necessary
for
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the protection or preservation of that Attorney's interest in the
Mortgage Loans, the Mortgages, the Mortgage Deeds and their Related
Security or which ought to be done under the covenants, undertakings
and provisions contained in the Mortgage Sale Agreement including
(without limitation) any or all of the following that is say:
(a) to exercise its rights, powers and discretions under the
Mortgage Loans, the Mortgages, the Mortgage Deeds and the
Related Security including the right to fix the rate or rates
of interest payable under the Mortgage Loans in accordance
with the terms thereof (including whilst such Mortgage Loans
subsist and subject to the consent of the Mortgages Trustee
being given to the setting of such rates, setting the Standard
Variable Rate of the Seller, such other discretionary rates
and margins applicable to the Mortgage Loans and (other than
in respect of the Security Trustee) the rate of (and terms
relating to) the Existing Borrowers' Re-Fix Rate in the
circumstances referred to in Clause 4 (Interest Rates) of the
Administration Agreement provided that nothing in this Clause
shall prevent the Seller (or any of its attorneys from time to
time) from setting higher rates (and in the case of the
Existing Borrowers' Re-Fix Rate, imposing terms more
advantageous to the Mortgages Trustee) than those set or to be
set or required or to be required by the Mortgages Trustee or
Funding under this power of attorney;
(b) to exercise all the powers exercisable by the Seller by reason
of its remaining for the time being the registered owner at
H.M. Land Registry or registered or recorded heritable
creditor in the Registers of Scotland of any of the Mortgage
Loans, the Mortgages, the Mortgage Deeds and the Related
Security and in particular, but without prejudice to the
generality of the foregoing, to make Further Advances to
Borrowers;
(c) to demand, xxx for and receive all moneys due or payable under
the Mortgage Loans, the Mortgages, the Mortgage Deeds and the
Related Security or any such collateral security or related
rights;
(d) to execute, sign, seal and deliver (using the company seal of
the Seller where appropriate) a conveyance, assignation or
transfer of the Mortgage Loans, the Mortgages, the Mortgage
Deeds and the Related Security or any of them to the Mortgages
Trustee and its successors in title or other person or persons
entitled to the benefit thereof;
(e) to execute, sign, seal and deliver (using the company seal of
the Seller where appropriate) a conveyance, assignment,
assignation or transfer of the Related Security or any item
comprised therein (to the extent only that such item or items
relate to the Mortgage Loans) to the Mortgages Trustee and its
successors in title or other person or persons entitled to the
benefit thereof or entitled to be registered or recorded at
H.M. Land Registry or the Registers of Scotland as proprietor
or heritable creditor thereof (as the case may be);
(f) to discharge the Mortgages or the Related Security or any of
them and to sign, seal, deliver and execute such receipts,
releases, surrenders, instruments and deeds as may
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be required or advisable in order to discharge the relevant
Mortgaged Property or Properties from the Mortgages or any of
them; and
(g) to do every other act or thing which the Seller is obliged to
do under the Mortgage Sale Agreement or which that Attorney
may otherwise consider to be necessary proper or expedient for
fully and effectually vesting or transferring the interests
sold thereunder in the Mortgage Loans, the Mortgages, the
Mortgage Deeds and their Related Security or any or each of
them and/or the Seller's estate right and title therein or
thereto in the Mortgages Trustee and its successors in title
or other person or persons entitled to the benefit thereof (as
the case may be) in the same manner and as fully and
effectually in all respects as the Seller could have done.
2. Each Attorney shall have the power by writing under its hand by an
officer of the Attorney from time to time to appoint a substitute who
shall have power to act on behalf of the Seller as if that substitute
shall have been originally appointed Attorney by this deed (including,
without limitation, the power of further substitution) and/or to
revoke any such appointment at any time without assigning any reason
therefor.
3. The laws of England shall apply to this deed and the interpretation
thereof and to all acts of the Attorney carried our or purported to be
carried out under the terms hereof.
4. The Seller hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorneys shall lawfully do or
cause to be done in and concerning the Mortgage Loans, the Mortgages
or the Mortgage Deeds or their Related Security by virtue of this
deed.
IN WITNESS whereof the Seller has executed this document as a deed the day and
year first before written.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed in the presence of: )
____________________________________
Authorised Signatory
Name:
Title:
____________________________________
Authorised Signatory
Name:
Title:
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SCHEDULE 11
FORM OF SCOTTISH TRUST DEED
DECLARATION OF TRUST
among
NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(registered number 3273685), having its registered office at Northern Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (in its capacity as seller of the
Mortgage Loans, the "Seller" and, in its capacity as a beneficiary of the
Mortgages Trust, the "Seller Beneficiary");
GRANITE FINANCE TRUSTEES LIMITED, incorporated under the laws of Jersey
(registered number 79309), and having its registered office at 00 Xxxxxxxxx
Xxxxxx, Xx. Xxxxxx, Xxxxxx, XX0 0XX, Channel Islands (the "Mortgages
Trustee"); and
GRANITE FINANCE FUNDING LIMITED, incorporated under the laws of Jersey
(registered number 79308), but acting out of its branch office established in
England (registered overseas company number FC022999 and branch number
BR005916) at 0 Xxxxx Xxxx Xxxxx, Xxxxxx XX0X 0XX ("Funding" and, in its
capacity as a beneficiary of the Mortgages Trust, the "Funding Beneficiary"
and, together with the Seller Beneficiary, the "Beneficiaries" and each a
"Beneficiary").
WHEREAS:
(A) Title to the Scottish Trust Property referred to below is held by and
vested in the Seller;
(B) In terms of the Mortgages Trust Deed entered into among the Seller,
Funding and the Mortgages Trustee dated 26 March 2001 (as amended,
restated, varied, supplemented or novated from time to time, the
"Mortgages Trust Deed") and the Mortgages Trust constituted in terms
thereof the Mortgages Trustee holds the Trust Property on trust for
the Beneficiaries;
(C) In terms of the Mortgage Sale Agreement entered into among the Seller,
the Mortgages Trustee, Funding and the Security Trustee dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time
to time, the "Mortgage Sale Agreement") the Seller has agreed to sell
and assign the Scottish Trust Property to the Mortgages Trustee to be
held thereafter by the Mortgages Trustee under and in terms of the
Mortgages Trust; and
(D) In implementation of Clause 4.4 of the Mortgage Sale Agreement and
pending the taking of legal title to the 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:
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1 Interpretation
In this deed:-
1.1 Words and expressions defined in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to the Master
Definitions [ ] Amendment and Restatement Deed made on [ ] between,
among others, the parties hereto (as the same have been and may be
further amended , restated, varied or supplemented from time to time
with the consent of the parties thereto) shall, except where the
context otherwise requires and save where otherwise defined herein,
have the same meanings in this deed, including the recitals hereto,
and this deed shall be construed in accordance with the interpretation
provisions set out in Clause 2 thereof; and
1.2 "Scottish Trust Property" shall mean the Scottish Mortgage Loans and
the Scottish Mortgages and other Related Security relative thereto
brief particulars of which are detailed in the schedule annexed and
executed as relative hereto, together with:
a) all principal sums (including all Further Advances, Further
Draws and Re-Draws), interest and expenses, present or future,
comprised therein and secured thereby and the right to demand,
recover, receive and give receipts for the same;
b) the Seller's whole right and interest in the Mortgaged
Properties secured by the said Scottish Mortgages;
c) all right of action of the Seller against any person in
connection with any report, valuation, opinion, certificate,
consent or other statement of fact or opinion given in
connection with any of the said Scottish Mortgage Loans and
their Related Security;
d) all powers and remedies for enforcing the said Scottish
Mortgage Loans and their Related Security and all proceeds
resulting therefrom; and
e) all other monies, rights, interests, benefits and others
pertaining thereto or deriving therefrom, including the
benefit and proceeds of any insurance policy pertaining
thereto.
2 Declaration of Trust
The Seller hereby DECLARES that from and after the date hereof it
holds and, subject to Clause 9 (Termination of Trust) hereof, shall
henceforth hold the Scottish Trust Property and its whole rights,
title, benefit 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 hereof immediately subsequent to the
execution of this Deed by the Seller acknowledges such intimation.
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4 Dealings with Trust Property and Negative Pledge
The Seller warrants and undertakes to the Mortgages Trustee that:
4.1 as at the date hereof, it holds (subject to any pending
registration or recording in the Registers of Scotland) legal
title to the Scottish Trust Property unencumbered by any fixed
or floating charge or other Security Interest;
4.2 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
property or part thereof remains subject to the trust hereby
created; and
4.3 it shall deal with the Scottish Trust Property (including
without limitation 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 9 (Termination of
Trust) hereof, any such action as may be necessary (including
without limitation 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 Change of Trustee
Except with the prior written consent of the Mortgages Trustee or its
foresaids and (for so long as each retains any right or interest in
the Scottish Trust Property) Funding and the Security Trustee, the
Seller shall not be entitled to resign office as a trustee or assume a
new trustee or trustees under this Deed.
6 Power of Beneficiary
6.1 The Mortgages Trustee, as beneficiary hereunder, shall have
the right in the circumstances stated in Clause 6 (Perfection
of the Assignment) of the Mortgage Sale Agreement to complete
its title to the Scottish Trust Property or any part thereof
or to call upon the Seller to execute and deliver to the
Mortgages Trustee or its foresaids valid assignations and
transfers (including where applicable Scottish Transfers) of
the Scottish Trust Property or any part thereof, and that
notwithstanding the winding-up of the Seller or the
administration of the Seller, or the appointment of any
receiver to all or any part of the Scottish Trust Property.
6.2 Without prejudice to the generality of Clause 6.1, 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(a) to (f) 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 Mortgages comprised within the
Scottish Trust Property.
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6.3 For further assuring the said rights and powers specified in
this Clause 6, the Seller has granted a power of attorney in
favour of the Mortgages Trustee, Funding and the Security
Trustee substantially in the form set out in Schedule 10 to
the Mortgage Sale Agreement.
7 Mortgages Trustee Declaration of Trust
7.1 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 under and in terms of the
Mortgages Trust and all monies received or held by the
Mortgages Trustee relating thereto or deriving therefrom have
been and shall be comprised in the Trust Property as defined
in the Mortgages Trust Deed and shall be subject to and
administered by the whole terms and conditions of the
Mortgages Trust Deed and the Administration Agreement.
7.2 Each of the Seller, the Seller Beneficiary, Funding and the
Funding Beneficiary hereby acknowledge, accept and agree to
the declaration constituted by and the whole other terms and
conditions of the foregoing Clause 7.1.
8 Mortgages Trust Intimation
The Mortgages Trustee hereby intimates to the Beneficiaries of the
Mortgages Trust, the declaration of trust made in terms of Clause 7
hereof and the Beneficiaries of the Mortgages Trust by their
respective executions of this Deed acknowledge such intimation.
9 Termination of Trust
If at any time during the subsistence of the trust hereby declared and
created:
9.1 full 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 6 (Perfection of the
Assignment) of the Mortgage Sale Agreement (which in the case
of any Scottish Mortgage shall be constituted by the
registration or recording of the title thereto in the
Registers of Scotland); or
9.2 any Scottish Mortgage Loan and Related Security comprised
within the Scottish Trust Property has been repurchased by the
Seller pursuant to Clauses 8.4 to 8.6 (inclusive) of the
Mortgage Sale Agreement; or
9.3 any such Scottish Mortgage Loan and Related Security has been
redeemed in full and therefore no longer forms part of the
Mortgage Portfolio; then
the trust hereby declared and created shall (but only when the
relevant events or transaction have been completed irrevocably,
validly and 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.
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10 Variation
This Deed and the trust hereby declared and created shall not be
varied in any respect without the consent in writing of the Mortgages
Trustee or its foresaids and (for so long as each retains any right or
interest in the Scottish Trust Property) Funding and the Security
Trustee.
11 Governing Law
11.1 This Deed shall be governed by, and construed in accordance with,
Scots law, other than Clauses 7 and 8 hereof which shall be governed
by, and construed in accordance with, English law.
11.2 The parties hereto submit to 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 consent to the registration of this deed for preservation.
IN WITNESS WHEREOF these presents consisting of this and the preceding [four]
pages together with the Schedule hereto are subscribed by the Seller, the
Mortgages Trustee and Funding as follows:
As Seller and as Seller Beneficiary:
SUBSCRIBED by
NORTHERN ROCK PLC
acting by:
...................................... Director .................................... Director
(Print Full Name) (Signature)
...................................... Director/ .................................... Director/
(Print Full Name) Secretary (Signature) Secretary
all together at
on
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As Mortgages Trustee:
SUBSCRIBED by
GRANITE FINANCE TRUSTEES LIMITED
acting by:
...................................... Director .................................... Director
(Print Full Name) (Signature)
...................................... Director/ .................................... Director/
(Print Full Name) Secretary (Signature) Secretary
all together at
on
As Funding and as Funding Beneficiary:
SUBSCRIBED by
GRANITE FINANCE FUNDING LIMITED
acting by:
...................................... Director .................................... Director
(Print Full Name) (Signature)
...................................... Director/ .................................... Director/
(Print Full Name) Secretary (Signature) Secretary
all together at
on
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This is the Schedule to the foregoing Scottish Trust Deed between Northern
Rock PLC, Granite Finance Trustees Limited and Granite Finance Funding Limited
Scottish Loans and Related Security
1 2 3 4
Account No. Property Address Borrower Name(s) Date of
Mortgage
Completion
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SCHEDULE 12
LENDING CRITERIA(1)
General
To proceed with obtaining a Mortgage Loan, each prospective Borrower completes
an application form which includes information with respect to the applicant's
income from all sources, current employment details, bank account information
(where the Borrower has a bank account), current mortgage information (if
applicable) and certain other personal information. A credit reference agency
search is made against each Borrower at their current address and, if
necessary, former addresses, in all cases which will give details of any
public information which includes county court judgements and details of any
bankruptcy.
Employment details
The Seller operates the following policy in respect of the verification of
Borrower income details. Under this policy, Borrowers are categorised as
either "employed" or "self-employed" by the Seller.
Proof of income for employed prospective Borrowers may be established by:
(a) two current cumulative monthly payslips or, if paid weekly, the last
three consecutive payslips; or
(b) Form P60, or employer's reference, with evidence of continued
employment.
Proof of income for self-employed prospective Borrowers may be established by:
(a) a letter from the Borrower's accountant in acceptable form; or
(b) acceptable confirmation of self-employment which might include any of
a tax return, accountant's letter or a trade invoice, together with a
certificate from the Borrower as to income.
For certain Mortgage Loan products, particularly those that may involve larger
maximum loan amounts or higher loan to value ("LTV") ratios, the Seller
generally will require an acceptable accountant's letter or audited accounts.
Income Capacity
The following maximum income multiples are applied in determining the amount
of the Mortgage Loan:
(a) Single applicant- 3.50 times gross income for all Mortgage Loans
(other than Together Mortgage Loans); 3.80 times gross income for
Together Mortgage Loans.
-----------------------
1 These Lending Criteria apply to Mortgage Loans other than Personal Secured
Loans.
77
(b) Joint applicants - a sum equal to: (1) the higher of 2.75 times the
joint gross income of the applicants (3.00 times joint gross income
for Together Mortgage Loans), or 3.50 times the highest earning
applicant's gross income (3.80 times the highest joint gross income
for Together Mortgage Loans) plus (2) the gross income of the other
applicant.
Valuation
The Seller requires that a valuation of the Mortgaged Property be obtained
either from its in-house valuation department or from an independent firm of
professional valuers selected from a panel of approved valuers. Details of
professional indemnity insurance held by panel valuers are kept by the Seller.
All valuations of Properties are reviewed by the person underwriting the
Mortgage Loan and/or the valuation team.
Property Types
The Seller applies the criteria set out below in determining the eligibility
of Properties to serve as security for Mortgage Loans. Under these criteria,
eligible property types include freehold, heritable and leasehold houses,
leasehold and heritable flats and mixed commercial and residential use
properties where there is a separate entrance for the residential part of the
Mortgaged Property. In the case of a Mortgage Loan secured by a leasehold
property, the Seller requires that the unexpired term of the lease be at least
30 years from the end of the agreed mortgage term, with a minimum remaining
term of 50 years from the beginning of the mortgage term.
Certain property types falling outside the criteria may be considered on a
case by case basis. However, certain property types will not be considered for
the purposes of providing security for a Mortgage Loan. The types of property
falling within this category comprise freehold flats (in England and Wales),
shared ownership or shared equity schemes and properties of non-standard
construction of a type considered to be defective.
Loan Amount
Generally, the maximum loan amount is (GBP)500,000, but this varies
according to the application in question. In exceptional cases, this limit may
be exceeded.
Term
Each Mortgage Loan must have an initial term of between 7 and 30 years (in the
case of a Together Mortgage Loan, a Together Connections Mortgage Loan and a
Connections Mortgage Loan) or between 7 and 35 years in the case of all other
Mortgage Loans.
Age of applicant
All Borrowers in respect of non-Together Mortgage Loans must be aged 18 or
over. All Borrowers in respect of Together Mortgage Loans must be aged 21 or
over. There are no maximum age limits.
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Discretion to lend outside Lending Criteria
On a case-by-case basis, and within approved limits as detailed in the
Seller's lending policy, the Seller may have determined that, based upon
compensating factors, a prospective Borrower who did not strictly qualify
under its lending criteria warranted an underwriting exception. Compensating
factors may include, but are not limited to, a low LTV ratio, stable
employment and time in residence at the applicant's current residence.
Maximum Loan To Value
For Mortgage Loans up to (GBP)250,000, the maximum LTV ratio permitted is 95
per cent. of the current market value of the Mortgaged Property determined by
the valuation. For Mortgage Loans up to (GBP)400,000 the maximum LTV ratio
permitted is 90 per cent. of the current market value of the Mortgaged
Property determined by relevant valuation. For Mortgage Loans of over
(GBP)400,000 the maximum LTV ratio permitted is 85 per cent. of the current
market value of the Mortgaged Property determined by valuation.
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SCHEDULE 13
STANDARD DOCUMENTATION
Doc No. Document Period in Use
1. (a) NRBS Mortgage Offer - General Conditions 01/07/95 to 31/12/95
(b)NRBS Mortgage Offer - General Conditions 01/01/96 to 30/11/96
(c)NRBS Mortgage Offer - General Conditions 01/12/96 to 30/09/97
2. NRBS Mortgage Deed 01/07/95 to 30/09/97
3. NRBS Mortgage Conditions Booklet 1995 01/07/95 to 30/09/97
4. (a)NR plc Mortgage Offer - General Conditions 01/10/97 to 31/12/97
(b)NR plc Mortgage Offer - General Conditions 01/12/97 to 31/12/97
(c)NR plc Mortgage Offer - General Conditions 01/01/98 to 31/05/98
(d)NR plc Mortgage Offer - General Conditions 01/06/98 to 31/12/98
(e)NR plc Mortgage Offer - General Conditions 01/01/99 to present
5. NRBS/NR plc Transitional Mortgage Deed 01/07/97 to 01/10/97
6. NR plc Mortgage Deed 01/10/97 to present
7. NR plc Mortgage Conditions 1997 01/10/97 to present
8. NR plc "Together" Mortgage Deed 01/04/99 to present
9. Discounted Mortgage Brochures
10. Discounted Mortgage Special Conditions
11. Cashback Mortgage Brochures
12. Cashback Mortgage Special Conditions
13. Fixed Rate Mortgage Brochures
14. Fixed Rate Mortgage Special Conditions
15. Together Mortgage Brochures
16. Together Mortgage Special Conditions
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[Scottish documents to be added]
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APPENDIX A
THE INITIAL MORTGAGE LOAN PORTFOLIO
Account No Property Address Name of Borrower(s) Date of Current Balance
Mortgage
Completion
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