DRAFT
Exhibit 4.2
AMENDED AND RESTATED MORTGAGES TRUST DEED
DATED [*], 2005
ABBEY NATIONAL PLC
AND
XXXXXX FUNDING LIMITED
AND
XXXXXX TRUSTEES LIMITED
AND
SPV MANAGEMENT LIMITED
XXXXX & XXXXX
XXXXX & XXXXX LLP
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and Construction...........................................2
2. Creation of Mortgages Trust............................................2
3. Conditions Precedent 3
4. Acquisition by Funding of an Increased Interest in the Trust Property..3
5. Acquisition by Seller of an Interest Relating to Capitalised Interest..5
6. Payment by the Seller to Funding of the amount outstanding under an
Intercompany Loan......................................................6
7. Initial Funding Share and Initial Seller Share.........................7
8. Adjustment of Funding Share Percentage and Seller Share Percentage
on Distribution Dates..................................................7
9. Minimum Seller Share..................................................10
10. Allocation and Distribution of Revenue Receipts.......................11
11. Allocation and Distribution of Principal Receipts.....................12
12. Allocation of Losses..................................................15
13. Ledgers...............................................................15
14. Costs and Expenses of the Mortgages Trustee...........................16
15. Directions from Beneficiaries.........................................16
16. Early Termination of the Mortgages Trust..............................17
17. Transfers.............................................................17
18. Covenants of the Mortgages Trustee....................................17
19. Power to Delegate.....................................................18
20. Powers of Investment..................................................19
21. Other Provisions Regarding the Mortgages Trustee......................19
22. No Retirement of Mortgages Trustee....................................20
23. Termination...........................................................20
24. Further Assurances....................................................21
25. Amendments, Etc.......................................................21
26. Non Petition Covenant.................................................21
27. No Partnership or Agency..............................................21
28. Calculations..........................................................21
29. No Waiver; Remedies...................................................21
30. Severability..........................................................21
31. Confidentiality.......................................................22
32. Exclusion of Third Party Rights.......................................22
33. Addresses for Notices.................................................23
34. Governing Law and Submission to Jurisdiction..........................23
THIS AMENDED AND RESTATED MORTGAGES TRUST DEED is made on [*], 2005
BETWEEN:
(1) ABBEY NATIONAL PLC (registered number 2294747), a public limited company
incorporated under the laws of England and Wales whose registered office
is at Abbey National House, 0 Xxxxxx Xxxxxx, Xxxxxx'x Xxxxx, Xxxxxx XX0
0XX in its capacity as Seller, Beneficiary and Cash Manager;
(2) XXXXXX FUNDING LIMITED (registered number 3982428), a private limited
company incorporated under the laws of England and Wales whose
registered office is at Abbey National House, 0 Xxxxxx Xxxxxx, Xxxxxxx
Xxxxx, Xxxxxx XX0 0XX in its capacity as a Beneficiary;
(3) XXXXXX TRUSTEES LIMITED (registered number 3982431), a private limited
company incorporated under the laws of England and Wales whose
registered office is at Abbey National House, 0 Xxxxxx Xxxxxx, Xxxxxxx
Xxxxx, Xxxxxx XX0 0XX in its capacity as Mortgages Trustee; and
(4) SPV MANAGEMENT LIMITED (registered number 2548079), a private limited
company incorporated under the laws of England and Wales whose
registered office is at Tower 42, International Finance Centre, 00 Xxx
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX.
WHEREAS:
(A) SPV Management agreed to constitute the Mortgages Trust in favour of
Funding and the Seller on the terms and subject to the conditions set
out in the Mortgages Trust Deed dated 25th July, 2000 (as amended and/or
restated from time to time, the MORTGAGES TRUST DEED).
(B) The Mortgages Trustee agreed to hold the Trust Property as trustee for
the Beneficiaries upon, with and subject to the trusts, powers and
provisions of the Mortgages Trust Deed.
(C) The Seller carries on the business of, inter alia, originating
residential first mortgage loans to individual Borrowers in England,
Wales and Scotland and of managing and administering such mortgage
loans. The Seller assigned an initial portfolio of such mortgage loans
on 26th, July 2000 and new portfolios of such mortgages loans on
subsequent dates to the Mortgages Trustee pursuant to the Mortgage Sale
Agreement, which portfolio is held by the Mortgages Trustee as trustee
for the Beneficiaries upon, with and subject to the trusts, powers and
provisions of the Mortgages Trust Deed.
(D) On 29th November, 2000 the parties to the Mortgages Trust Deed agreed to
amend the terms of the Mortgages Trust Deed as set out in an Amendment
Agreement to the Mortgages Trust Deed to provide for repayment by
Funding of its obligations in respect of certain term advances known as
Scheduled Amortisation Term Advances.
(E) On 23rd May, 2001 the parties to the Mortgages Trust Deed again agreed
to amend the terms of the Mortgages Trust Deed as set out in the Second
Deed of Amendment to the Mortgages Trust Deed to exclude application of
the Trustee Xxx 0000.
(F) On 5th July, 2001 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
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(G) On 8th November, 2001 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(H) On 7th November, 2002 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(I) On 26th March, 2003 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(J) On 1st April, 2004 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in
the Amended and Restated Mortgages Trust Deed of the same date.
(K) The parties to the Mortgages Trust Deed have again agreed to amend and
restate the terms of the Mortgages Trust Deed as set out herein.
NOW THIS DEED WITNESSES:
1. DEFINITIONS AND CONSTRUCTION
1.1 The Amended and Restated Master Definitions and Construction Schedule
signed for the purposes of identification by Xxxxx & Xxxxx LLP and
Xxxxxxxxx and May on [*], 2005 (as the same may be amended, varied or
supplemented from time to time with the consent of the parties hereto)
is expressly and specifically incorporated into this Agreement and,
accordingly, the expressions defined in the Amended and Restated Master
Definitions and Construction Schedule (as so amended, varied or
supplemented) shall, except where the context otherwise requires and
save where otherwise defined herein, have the same meanings in this
Agreement, including the Recitals hereto and this Agreement shall be
construed in accordance with the interpretation provisions set out in
Clause 2 of that Amended and Restated Master Definitions and
Construction Schedule.
1.2 This Deed amends and restates the Mortgages Trust Deed made on 25th
July, 2000 between the parties hereto as amended on 29th November, 2000
and 23rd May, 2001 and amended and restated on 5th July, 2001, 8th
November, 2001, 7th November, 2002, 26th March, 2003 and 1st April, 2004
(the PRINCIPAL DEED). As of the date of this Deed, any future rights or
obligations (excluding such obligations accrued to the date of this
Deed) of a party under the Principal Deed shall be extinguished and
shall instead be governed by this Deed.
2. CREATION OF MORTGAGES TRUST
2.1 INITIAL TRUST PROPERTY
On 25th July, 2000 SPV Management settled on trust the sum of [POUND]100
(one hundred pounds) (the INITIAL TRUST PROPERTY) to be held on trust
absolutely as to both capital and income by the Mortgages Trustee for
the benefit, as tenants in common, of the Seller as to the Initial
Seller Share Percentage and Funding as to the Initial Funding Share
Percentage.
2.2 INITIAL CLOSING TRUST PROPERTY
Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
assigned the Initial Closing Trust Property on the Initial Closing Date.
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2.3 FUTURE TRUST PROPERTY
From time to time and pursuant to the Mortgage Sale Agreement, the
Seller has assigned and intends to assign Future Trust Property to the
Mortgages Trustee.
2.4 TRUST PROPERTY
Subject to Clause 3, the Mortgages Trustee shall hold the Trust Property
as to both capital and income on trust absolutely for Funding (as to the
Funding Share) and for the Seller (as to the Seller Share) as tenants in
common upon, with and subject to all the trusts, powers and provisions
of this Deed.
3. CONDITIONS PRECEDENT
3.1 The Initial Trust Property is held by the Mortgages Trustee on the
Mortgages Trust.
3.2 The Initial Closing Trust Property shall be held by the Mortgages
Trustee on the Mortgages Trust upon the satisfaction of the following
conditions precedent:
(a) due execution and delivery of the Mortgage Sale Agreement by all
parties to it;
(b) due execution and delivery of this Deed by all parties to it;
and
(c) payment by Funding to the Seller of the Initial Consideration.
3.3 Any Future Trust Property shall be held by the Mortgages Trustee on the
Mortgages Trust subject to satisfaction of the conditions set out in
Clause 4.1 of the Mortgage Sale Agreement for the transfer of New Loans
and their New Related Security to the Mortgages Trustee.
4. ACQUISITION BY FUNDING OF AN INCREASED INTEREST IN THE TRUST PROPERTY
4.1 OFFER TO ASSIGN AND CONDITIONS TO ASSIGNMENT
On not more than 60 nor less than 30 days' written notice, Funding may
offer to make a payment to the Seller to acquire an interest in the
Trust Property with the effect of increasing the Funding Share on the
Distribution Date specified in that notice. Such offer shall only be
valid if the following conditions precedent are satisfied on the
Distribution Date:
(a) the Principal Deficiency Ledger does not have a debit balance
(which remains outstanding) as at the most recent Interest
Payment Date;
(b) no Note Event of Default or Intercompany Loan Event of Default
shall have occurred which is continuing or unwaived as at the
relevant Distribution Date;
(c) the Security Trustee is not aware that the proposed acquisition
would adversely affect the then current credit ratings by the
Rating Agencies (or any of them) of the Notes;
(d) the Notes have been issued by the relevant Issuer, the
subscription proceeds received on behalf of the relevant Issuer
and advanced by the relevant Issuer to Funding pursuant to an
Intercompany Loan Agreement, the proceeds of which will be
applied by Funding to make the payment referred to in the notice
on the relevant Distribution Date;
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(e) Funding has entered into, if necessary, a New Start-up Loan, any
new variable rate swap, new fixed floating rate swap and a new
tracker rate swap and adjustments have been made, if required,
to the First Reserve Fund, the Second Reserve Fund and the
Funding Reserve Fund;
(f) receipt of a solvency certificate from the Seller in form and
content acceptable to the Mortgages Trustee, Funding and the
Security Trustee;
(g) as at the relevant Distribution Date, the aggregate Outstanding
Principal Balance of Loans constituting the Trust Property, in
respect of which the aggregate amount in arrear is more than
three times the monthly payment then due, is less than 4 per
cent. of the aggregate Outstanding Principal Balance of all
Loans constituting the Trust Property;
(h) unless otherwise agreed by Xxxxx'x, Standard and Poor's or
Fitch, as the case may be, the short term, unsecured,
unguaranteed and unsubordinated debt obligations of the Seller
are rated at least P-1 by Xxxxx'x, A-1 by Standard and Poor's
and F1 by Fitch at the time of, and immediately following, the
proposed acquisition;
(i) the product of the WAFF and WALS for the Loans constituting the
Trust Property calculated on the relevant Distribution Date in
the same way as for the Initial Portfolio (or as agreed by the
Servicer and the Rating Agencies from time to time) does not
exceed the product of the WAFF and WALS for the Loans
constituting the Trust Property calculated on the most recent
previous Closing Date, plus 0.25 per cent.;
(j) the loan-to-value ratio of Loans in the Trust Property, after
application of the LTV Test on the relevant Distribution Date,
does not exceed the loan-to-value ratio (based on the LTV Test)
of Loans in the Trust Property on the most recent previous
Closing Date plus 0.25 per cent.; and
(k) the First Reserve Fund has not been debited on or before the
relevant Distribution Date for the purposes of curing a
Principal Deficiency in respect of the Term Advances in
circumstances where the First Reserve Fund has not been
replenished by a corresponding amount by the relevant
Distribution Date.
Funding may not offer to make a payment to the Seller in consideration
for an increase in the Funding Share after any Interest Payment Date on
which any Issuer (including any New Issuer) does not exercise its option
to redeem the Notes or any New Notes issued by it pursuant to the Terms
and Conditions of such Notes or, as the case may be, any New Notes (but
only where such right of redemption arises on or after a particular
specified date and not as a result of the occurrence of any event
specified in the Terms and Conditions).
4.2 COMPLETION OF ASSIGNMENT
Subject to satisfaction of the conditions precedent set out in Clause
4.1 above and to acceptance of that offer by the Seller, Funding shall
pay to the Seller an amount equal to the increase in the Funding Share
of the Trust Property and the Funding Share of the Trust Property shall
increase by a corresponding amount, and the Seller Share shall decrease
by the same amount.
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4.3 AUDIT OF LOANS CONSTITUTING THE TRUST PROPERTY
If the short term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller fall below A-1 by Standard & Poor's, P-1 by
Xxxxx'x and/or F1 by Fitch, then the Beneficiaries shall appoint a firm
of independent auditors (approved by the Rating Agencies) to determine
whether the Loans and their Related Security (or any part of them)
constituting the Trust Property complied with the representations and
warranties set out in Schedule 1 of the Mortgage Sale Agreement as at
the date such Loans were assigned to the Mortgages Trustee. The costs of
such independent auditors shall be borne by the Beneficiaries pro rata
according to their respective current percentage shares in the Trust
Property.
4.4 TAX
(a) Any payment by Funding to the Seller to acquire an interest in the Trust
Property shall be inclusive of any amount in respect of applicable VAT
(if any); and
(b) Any stamp duty or stamp duty reserve tax in respect of any acquisition
of Trust Property shall be payable by the Seller.
5. ACQUISITION BY SELLER OF AN INTEREST RELATING TO CAPITALISED INTEREST
5.1 Any increase in the Outstanding Principal Balance due to Capitalised
Interest will be allocated to the Funding Share of the Trust Property
and to the Seller Share of the Trust Property, based on respectively the
Funding Share Percentage and the Seller Share Percentage in the Trust
Property as calculated on the previous Distribution Date.
5.2 Prior to an Insolvency Event occurring in respect of the Seller, on each
Distribution Date the Seller shall make a cash payment to Funding in an
amount equal to Funding's share of the Capitalised Interest arising
since the last Distribution Date in respect of those Loans that are
subject to Payment Holidays or Underpayments. In consideration for the
making of such payment the Seller Share of the Trust Property will
increase by an amount equal to the amount paid to Funding for Funding's
share of the Capitalised Interest, and the Funding Share will decrease
by a corresponding amount. The cash payment shall be made in accordance
with Clause 5.4 below.
5.3 If an Insolvency Event occurs in respect of the Seller, then the Seller
may make payment to Funding in respect of its share of the Capitalised
Interest in the same manner as is contemplated in Clause 5.2, but it is
not obliged to do so.
5.4 In respect of the cash payment to be made by the Seller pursuant to
Clause 5.2, the Seller hereby directs the Mortgages Trustee to deduct
from the Seller's share of the Mortgages Trust Available Revenue
Receipts (allocated to the Seller pursuant to Clause 10.2 of this Deed)
an amount equal to such cash payment and to pay the same to Funding in
satisfaction of the Seller's obligations under Clause 5.2. To the extent
that the Seller's share of the Mortgages Trust Available Revenue
Receipts is less than the amount required to be paid by it pursuant to
Clause 5.2, then the Seller shall pay an amount equal to the shortfall
directly to Funding from its own resources.
5.5 Any payment by the Seller pursuant to Clause 5.2 shall be exclusive of
any amount in respect of applicable VAT (which shall be paid by the
Seller in addition to payments made pursuant to Clause 5.2).
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6. PAYMENT BY THE SELLER TO FUNDING OF THE AMOUNT OUTSTANDING UNDER AN
INTERCOMPANY LOAN
6.1 CONDITIONS PRECEDENT TO ACCEPTANCE OF OFFER
Funding may accept any offer by the Seller to pay the amount outstanding
under any Series of Term Advances under an Intercompany Loan, but only
if:
(a) either:
(i) the Outstanding Principal Balance of the relevant Series
of Term Advances under the Intercompany Loan is less than
10 per cent. of the Outstanding Principal Balance of the
Term Advances of that Series immediately after the Term
Advances were drawn; or
(ii) (A) an Issuer would be required to deduct or withhold
from any payment of principal or interest or any other
amount under any of the Issuer Notes any amount for or on
account of any present or future taxes, duties,
assessments or governmental charges of whatever nature,
or (B) Funding would be required to deduct or withhold
from amounts due under an Intercompany Loan any amount on
account of any present or future taxes, duties,
assessments or governmental charges of whatever nature,
and that Issuer is not able to arrange the substitution
of a company incorporated in another jurisdiction
approved by the relevant Note Trustee as principal debtor
under the relevant Notes and as lender under the relevant
Issuer Intercompany Loan Agreement, as the case may be;
or
(iii) an Issuer has delivered a certificate to Funding, the
relevant Issuer Security Trustee and the Rating Agencies
to the effect that it would be unlawful for that Issuer
to make, fund or allow to remain outstanding a Term
Advance made by it under the relevant Intercompany Loan
Agreement and stating that that Issuer requires Funding
to prepay the Term Advance; or
(iv) (in relation to any Intercompany Loans, the Seventh
Issuer Intercompany Loans and Eighth Issuer Intercompany
Loans only) the new Basel Capital Accord (as described in
the consultative document "The New Basel Capital Accord"
published in April 2003 by the Basel Committee on Banking
Supervision) has been implemented in the United Kingdom,
whether by the rule of law, recommendation of best
practices or by any other regulation, no Seventh Issuer
Note Enforcement Notice or Eighth Issuer Note Enforcement
Notice has been served, the offer by the Seller is made
on or after the Interest Payment Date falling in April
2007 and the Seller has given not more than 60 days, and
not less than 30 days, notice of making an offer;
(b) the Security Trustee has received written confirmation from each
of the Rating Agencies that there would not be any adverse
effect on the then current ratings of the Notes if Funding
accepted the offer;
(c) Funding would receive the payment from the Seller on a
Distribution Date (together with VAT, if payable); and
(d) Funding will, and is entitled under the terms of that
Intercompany Loan to, apply the proceeds of the payment to repay
the relevant Series of Term Advances under that Intercompany
Loan and the relevant Issuer has confirmed to Funding that on
the next
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succeeding Funding Interest Payment Date it will use the
proceeds of the relevant payment to repay the corresponding
classes of Notes and that Issuer has exercised its option to
redeem the corresponding classes of Notes.
6.2 ADJUSTMENT TO SHARES IF OFFER ACCEPTED
If Funding accepts the offer as described in Clause 6.1 above, then the
Funding Share of the Trust Property shall decrease by an amount
corresponding to the amount paid by the Seller and the Seller Share of
the Trust Property shall increase by the same amount.
7. INITIAL FUNDING SHARE AND INITIAL SELLER SHARE
7.1 INITIAL FUNDING SHARE
The INITIAL FUNDING SHARE of the Trust Property was [POUND]35.25 at 25th
July, 2000 and [POUND]2,256,000,035.25 at the Initial Closing Date and
the INITIAL FUNDING SHARE PERCENTAGE was the Initial Funding Share
expressed as a percentage of the Trust Property at such date, that is to
say, 35.25 per cent..
7.2 INITIAL SELLER SHARE
The INITIAL SELLER SHARE of the Trust Property was the sum which remains
of the Trust Property after deduction of the Initial Funding Share. As
at 25th July, 2000, the Initial Seller Share was [POUND]64.75 and the
INITIAL SELLER SHARE PERCENTAGE was equal to 100 per cent. minus the
Initial Funding Share Percentage, that is to say, 64.75 per cent. The
amount of the Initial Seller Share and the Initial Seller Share
Percentage on the Initial Closing was determined immediately after the
Initial Closing Date.
7.3 ROUNDING OF PERCENTAGE SHARES
Except for the Initial Closing Date (and unless otherwise agreed by the
Beneficiaries), the Funding Share Percentage and the Seller Share
Percentage shall be calculated to five decimal places.
8. ADJUSTMENT OF FUNDING SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE ON
DISTRIBUTION DATES
8.1 DISTRIBUTION
On each Distribution Date, excluding for the avoidance of doubt, the
Initial Closing Date, the Funding Share Percentage and the Seller Share
Percentage will be recalculated by the Cash Manager (on behalf of the
Mortgages Trustee and the Beneficiaries) based on the aggregate
Outstanding Principal Balance of the Loans constituting the Trust
Property (as adjusted from time to time) on the second London Business
Day immediately preceding that Distribution Date. On each Distribution
Date, the Mortgages Trustee will distribute Revenue Receipts and
Principal Receipts in accordance with Clauses 10 and 11 hereof.
8.2 CURRENT FUNDING SHARE PERCENTAGE
On each Distribution Date and the date when the Mortgages Trust
terminates (in each case the RELEVANT DISTRIBUTION DATE), the CURRENT
FUNDING SHARE PERCENTAGE will be an amount, expressed as a percentage
(calculated to an accuracy of three decimal places (rounded upwards)),
equal to:
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A - B - C + D + E + F
--------------------- x 100
G
where:
A = the Current Funding Share as at the immediately preceding
Distribution Date (or, in the case of the first Distribution
Date, the Initial Funding Share as at the Initial Closing Date);
B = the amount of any Principal Receipts distributed to Funding on
that Relevant Distribution Date in accordance with the
provisions described in Clause 11 below;
C = the amount of any Losses sustained on the Loans in the period
from the last Distribution Date and ending on the Relevant
Distribution Date and allocated to Funding (based on the Funding
Share Percentage thereof calculated on the immediately preceding
Distribution Date or, in the case of the first Distribution
Date, the Initial Funding Share Percentage) in the Distribution
Period ending on the Relevant Distribution Date;
D = an amount equal to any consideration (excluding Deferred
Consideration) paid by Funding to the Seller in relation to any
New Loans assigned to the Mortgages Trustee on the Relevant
Distribution Date;
E = an amount equal to any consideration (excluding Deferred
Consideration) paid by Funding to the Seller in relation to any
acquisition by Funding from the Seller on the Relevant
Distribution Date of an interest in the Trust Property;
F = an amount equal to the portion of any Capitalised Interest
accrued on the Loans in the Distribution Period ending on the
Relevant Distribution Date which is allocated to the Funding
Share in accordance with Clause 5.1 less the amount of any
payment made by Seller to Funding pursuant to Clauses 5.2 or 5.3
as the case may be, in respect of such portion of Capitalised
Interest; and
G = the amount of the Retained Principal Receipts (if any) plus the
aggregate Outstanding Principal Balance of all the Loans
constituting the Trust Property as at the Relevant Distribution
Date after making the distributions, allocations and additions
referred to in (B), (C), (D), (E) and (F) above, and after
taking account of (i) any distributions of Principal Receipts to
Funding and the Seller; (ii) the amount of any Losses allocated
to Funding and the Seller; (iii) any increase in the Loan
balances due to Borrowers taking Payment Holidays or making
Underpayments under Flexible Loans; (iv) the adjustments
referred to paragraphs 8.4(a) to 8.4(e) (inclusive) below; and
(v) the amount of any other additions or subtractions to the
Trust Property.
8.3 CURRENT FUNDING SHARE
The CURRENT FUNDING SHARE will be an amount equal to:
A - B - C + D + E + F
where "A", "B", "C", "D", "E" and "F" have the meanings specified in
Clause 8.2 above.
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8.4 ADJUSTMENTS TO TRUST PROPERTY
On each Relevant Distribution Date the aggregate Outstanding Principal
Balance of the Loans constituting the Trust Property shall be reduced
or, as the case may be, deemed to be reduced for the purposes of the
calculation set out in "G" above, if any of the following events has
occurred in the Distribution Period ending on the Relevant Distribution
Date:
(a) any Borrower exercises a right of set-off in relation to Loans
constituting part of the Trust Property so that the amount of
principal and/or interest owing under a loan is reduced but no
corresponding amount is received by the Mortgages Trustee; in
which event the total amount of Trust Property shall be reduced
by an amount equal to the amount set-off; and/or
(b) a Loan or (as applicable) its Related Security (i) does not
comply with the Loan Warranties in the Mortgage Sale Agreement
or (ii) is the subject of a Product Switch or a Further Advance
or other obligation of the Seller to repurchase (including, for
the avoidance of doubt, any obligation to repurchase pursuant to
Clause 7.4 of the Mortgage Sale Agreement), and if the Seller
fails to repurchase the Loan or Loans under the relevant
Mortgage Account and their Related Security as required by the
terms of the Mortgage Sale Agreement, then the Trust Property
shall be deemed to be reduced for the purposes of the
calculation in "G" above by an amount equal to the Outstanding
Principal Balance of the relevant Loan or Loans under the
relevant Mortgage Account together with Arrears of Interest and
Accrued Interest; and/or
(c) the Seller would be required to repurchase a Loan and its
Related Security in accordance with the terms of the Mortgage
Sale Agreement, but such Loan and its Related Security are not
capable of repurchase, in which case the Trust Property shall be
deemed to be reduced for the purposes of the calculation in "G"
above by an amount equal to the Outstanding Principal Balance of
the relevant Loan or Loans under the relevant Mortgage Account
together with Arrears of Interest and Accrued Interest; and/or
(d) the Seller materially breaches any other obligation or warranty
under the Mortgage Sale Agreement and/or (for so long as it is
the Servicer) the Servicing Agreement, which is also grounds for
terminating the appointment of the Servicer in which event the
aggregate Outstanding Principal Balance of Loans constituting
the Trust Property shall be deemed for the purposes of the
calculation in "G" above to be reduced by an amount equivalent
to all losses, costs, liabilities, claims, expenses and damages
incurred by the Beneficiaries as a result of such breach; and/or
(e) the Seller Share of Mortgages Trustee Revenue Receipts is less
than the Loss Amount (as defined in Clause 10.3) payable to the
Mortgages Trustee and/or Funding in accordance with Clause 10.3,
in which case the Trust Property shall be deemed to be reduced
for the purposes of the calculation in "G" above by an amount
equal to the shortfall in the Loss Amount.
The reductions and deemed reductions set out in paragraphs 8.4(a),
8.4(b), 8.4(c), 8.4(d) and 8.4(e) above shall be made to the Seller
Share only of the Trust Property (or for the purposes of calculating the
Seller Share of the Trust Property as the case may be) until the Seller
Share is zero. If at, or any time after the Initial Closing Date the
Mortgages Trustee holds, or there is held to its order, or it receives,
or there is received to its order, any property, interest, right or
benefit relating to any Loan and its Related Security which is or has
been subject to any matter described in Clause 8.4(a) the Mortgages
Trustee will remit, assign or transfer the
9
same to the Seller, as the case may require, and until it does so or to
the extent that the Mortgage Trustee is unable to effect such
remittance, assignment or transfer, the Mortgages Trustee will hold such
property, interest, right or benefit and/or the proceeds thereof upon
trust absolutely for the Seller (separate from the Mortgages Trust).
8.5 CURRENT SELLER SHARE PERCENTAGE
On each Distribution Date, the CURRENT SELLER SHARE PERCENTAGE will be
an amount equal to:
100% - Current Funding Share Percentage.
8.6 CURRENT SELLER SHARE
The CURRENT SELLER SHARE will be an amount equal to:
The total amount of Trust Property - Current Funding Share.
8.7 FUNDING SHARE/SELLER SHARE
Neither the Funding Share nor the Seller Share may be reduced below
zero. At all times the Funding Share Percentage and the Seller Share
Percentage shall be equal to 100 per cent. of the Trust Property.
9. MINIMUM SELLER SHARE
9.1 INITIAL MINIMUM SELLER SHARE
The Seller Share of the Trust Property includes an amount equal to the
Minimum Seller Share. Unless and until the Funding Share of the Trust
Property is in an amount equal to zero or an Asset Trigger Event occurs,
the Seller will not be entitled to receive Principal Receipts which
would reduce the Seller Share of the Trust Property to an amount less
than the Minimum Seller Share and the Seller consents and directs the
Mortgages Trustee accordingly.
9.2 FLUCTUATION OF MINIMUM SELLER SHARE ON EACH DISTRIBUTION DATE
On and from the Ninth Issuer Closing Date, the amount of the Minimum
Seller Share will be recalculated on each Distribution Date in
accordance with the following formula:
W + X + Y + Z + AA
where:
W = 100% of the aggregate cleared balances of all savings accounts
opened in respect of Flexible Plus Loans;
X = 4.0% of the aggregate Outstanding Principal Balance of all Loans
comprised in the Trust Property;
Y = the product of: (p x q) x r where:
p = 8%;
q = the FLEXIBLE DRAW CAPACITY, being an amount equal to the
excess of (i) the maximum amount that Borrowers are
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included in the Trust Property (whether or not drawn)
over (ii) the aggregate principal balance of actual
Flexible Loan advances made to Borrowers in the Trust
Property on the relevant Distribution Date (but excluding
the Initial Advances made thereunder); and
r = 3;
Z = the aggregate sum of the reductions or deemed reductions made to
the Seller Share pursuant to Clauses 8.4(b), 8.4(c), 8.4(d) and
8.4(a) on that Distribution Date; and
AA = the aggregate entitlement of Borrowers to receive Reward
Cashbacks and Delayed Cashbacks.
9.3 RECALCULATION OF MINIMUM SELLER SHARE FOLLOWING OCCURRENCE OF
EXCEPTIONAL EVENTS
The calculation of the Minimum Seller Share in accordance with Clause
9.2 above will be recalculated with the agreement of the parties hereto,
the Security Trustee and the Rating Agencies if either (i) the Seller
merges or otherwise combines its business with another bank or other
financial institution so as to increase the risks associated with
Borrowers holding deposits in Abbey accounts or (ii) the aggregate
amount of the obligations to pay Delayed Cashbacks constitutes more than
1 per cent. of the value of the Trust Property.
10. ALLOCATION AND DISTRIBUTION OF REVENUE RECEIPTS
10.1 ALLOCATION AND DISTRIBUTION OF THIRD PARTY AMOUNTS
Pursuant to the Cash Management Agreement, the Cash Manager (at the
direction of the Mortgages Trustee on behalf of the Beneficiaries at
their direction and with their consent) will deduct, as and when
identified, Third Party Amounts from the Revenue Receipts standing to
the credit of the Mortgages Trustee GIC Account, and pay over the same
to the proper recipients thereof. The Mortgages Trustee and the
Beneficiaries hereby consent to such deductions.
10.2 ALLOCATION AND DISTRIBUTION OF MORTGAGES TRUSTEE AVAILABLE REVENUE
RECEIPTS
On each Distribution Date the Cash Manager (at the direction of the
Mortgages Trustee and on behalf of the Beneficiaries at their direction
and with their consent) will distribute Mortgages Trustee Available
Revenue Receipts as follows:
(a) firstly, in or towards satisfaction pro rata according to the
respective amounts thereof of:
(i) any costs, charges, liabilities and expenses then due or
to become due to the Mortgages Trustee under the
provisions of this Deed together with VAT thereon as
provided herein (if payable); and
(ii) any amounts due and payable by the Mortgages Trustee to
third parties in respect of the Mortgages Trust and
incurred without breach by the Mortgages Trustee of the
documents to which it is a party (and for which payment
has not been provided for elsewhere), including amounts
due to H.M Customs and Excise and/or to the Inland
Revenue or any other taxation authority which has
jurisdiction over the Trust Property or the Mortgages
Trustee in respect of any stamp, issue, registration,
documentary and other fees, duties and taxes (including
interest and penalties) payable by the Mortgages Trustee
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in connection with (i) the execution and delivery of this
Deed; (ii) any action to be taken by or on behalf of the
Mortgages Trustee to enforce or to resolve any doubt
concerning or, for any other purpose in relation to, the
Mortgages Trust Deed; and (iii) any such tax which is
primarily due from either or both of Abbey and Funding in
their capacities as Beneficiaries (and, for the avoidance
of doubt, only in such capacities) in circumstances where
the Mortgages Trustee has made a payment of such tax (or
part thereof) by reason of a failure by Abbey or Funding
to discharge their primary liability in respect of such
tax;
(b) secondly, in or towards satisfaction of any remuneration then
due and payable to the Servicer and any costs, charges,
liabilities and expenses then due or to become due to the
Servicer under the provisions of the Servicing Agreement,
together with VAT thereon as provided therein; and
(c) thirdly, subject to Clause 10.3 below, to pay Funding and the
Seller the Funding Share and the Seller Share respectively of
any remaining Mortgages Trustee Available Revenue Receipts,
calculated by multiplying the total amount of such remaining
Mortgages Trustee Available Revenue Receipts by the Current
Funding Share Percentage (calculated on the immediately
preceding Distribution Date), which product shall be allocated
to Funding, and the remaining Mortgages Trustee Available
Revenue Receipts which shall be allocated to the Seller (subject
to deducting any amounts due to the Mortgages Trustee and/or
Funding by way of set-off pursuant to Clause 7.3 of the Mortgage
Sale Agreement).
10.3 If, as a result of any of the matters referred to in paragraphs (a) to
(g) inclusive of Clause 7.4 of the Mortgage Sale Agreement, the
Mortgages Trustee and/or Funding suffers or incurs any costs, expenses,
losses or other claims in connection with any recovery of interest on
the Loans to which the Seller, the Mortgages Trustee or Funding was not
entitled or could not enforce (referred to in this Clause 10.3 as the
LOSS AMOUNT), then:
(a) the Seller Share of Mortgages Trustee Revenue Receipts shall be
reduced by an amount equal to the Loss Amount; and
(b) from the amount deducted from the Seller Share of the Mortgages
Trustee Revenue Receipts referred to in paragraph (a) above:
(i) an amount will be paid to the Mortgages Trustee equal to
the Loss Amount incurred by the Mortgages Trustee; and
(ii) an amount will be paid to Funding equal to the Loss
Amount incurred by Funding.
11. ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS
11.1 CALCULATION OF PRINCIPAL RECEIPTS:
On each Relevant Distribution Date, prior to distributing Principal
Receipts, the Cash Manager shall ascertain:
(a) the amount of Mortgages Trust Available Principal Receipts:
(b) whether the Cash Accumulation Period has started or would start
during the immediately succeeding Distribution Period in respect
of any Bullet Term Advance
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or any applicable Series 1 Term AAA Cash Amount (the Cash
Accumulation Period being calculated separately for each Bullet
Term Advance or each Series 1 Term AAA Cash Amount);
(c) whether amounts are outstanding in respect of any Pass-Through
Term Advances or Scheduled Amortisation Term Advances that are
then due and payable; and
(d) whether the Scheduled Amortisation Period has started or would
start during the immediately succeeding Distribution Period in
respect of any Scheduled Amortisation Term Advance.
11.2 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS PRIOR TO THE
OCCURRENCE OF A TRIGGER EVENT
Prior to the occurrence of a Trigger Event, on each Distribution Date,
the Cash Manager (at the direction of the Mortgages Trustee acting on
behalf of the Beneficiaries at their direction and with their consent)
shall apply Principal Receipts as provided in this Clause 11:
(a) (subject to the terms of, and after making the distributions
referred to in, paragraphs (b), (c), (d), (e) and (f) below),
all Principal Receipts shall be paid to the Seller until the
Seller Share of the Trust Property is equal to the Minimum
Seller Share (as determined on the previous Distribution Date);
(b) to allocate and distribute to Funding an amount equal to the
aggregate of the amounts required by Funding (i) to replenish
the First Reserve Fund to the extent that amounts have been
drawn from the First Reserve Fund to make scheduled repayments
of principal under any Intercompany Loan and (ii) to the extent
that there is a shortfall in the Funding Liquidity Reserve Fund
Required Amount, an amount equal to the shortfall required to be
paid by Funding into the Funding Liquidity Reserve Fund;
(c) after making the distributions in (b) above, from and including
the start of a Cash Accumulation Period, all Principal Receipts
shall be allocated and distributed to Funding (but only to the
extent that such payments shall not cause the Funding Share of
the Trust Property to fall below zero) until an amount equal to
the relevant Bullet Amount or the relevant Series 1 Term AAA
Cash Amount has been or will have been accumulated by Funding,
as shown on the Cash Accumulation Ledger and on the relevant
Cash Accumulation Sub-Ledger, as applicable;
(d) after making the distributions in (b) and (c) above, the Cash
Manager on behalf of the Mortgages Trustee shall allocate and
distribute Principal Receipts to Funding in an amount equal to
the Scheduled Amortisation Amount due on the relevant Scheduled
Amortisation Term Advance on the immediately succeeding Interest
Payment Date (but only to the extent that such payments shall
not cause the Funding Share of the Trust Property to fall below
zero);
(e) after making the distributions in (b), (c) and (d) above, from
and including the date when amounts are or will become
outstanding on the next following Interest Payment Date in
respect of one or more Pass-Through Term Advances that are due
and payable (the PAYABLE PASS-THROUGH TERM ADVANCES) under an
Intercompany Loan ignoring for these purposes the deferral of
repayment of any Term BBB Advance, any Term A Advance and any
Term AA Advance, then the aggregate amount of the following
amounts in respect of each Intercompany Loan under which such
Payable Pass-Through Term Advances arise shall be allocated and
distributed to Funding until all of such Payable Pass-Through
Term Advances are fully repaid or will on the next
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following Interest Payment Date be fully repaid. The amounts
referred to above shall be determined in respect of each
Intercompany Loan Agreement advanced by any Issuer to Funding
which then comprises a Payable Pass-Through Term Advance
(INTERCOMPANY LOAN AGREEMENT X) and shall be:
(i) prior to the occurrence of any option to redeem the Notes
(other than pursuant to Condition 5(E) of the Notes
(Optional Redemption for Tax and Other Reasons)) or any
New Notes issued by the Issuer (or a New Issuer) which is
the lender of such Intercompany Loan Agreement X (but
only where such right of redemption arises on or after a
particular specified date and not as a result of the
occurrence of any event specified in the Terms and
Conditions), the Outstanding Principal Balance of each
Payable Pass-Through Term Advance forming part of such
Intercompany Loan Agreement X; and
(ii) after the occurrence of any option to redeem the Notes
(other than pursuant to Condition 5(E) of the Notes
(Optional Redemption for Tax and Other Reasons)) or any
New Notes issued by the Issuer (or a New Issuer) which is
the lender of such Intercompany Loan Agreement X (but
only where such right of redemption arises on or after a
particular specified date and not as a result of the
occurrence of any event specified in the Terms and
Conditions), an amount calculated as follows:
Funding Share x Principal x Outstanding Principal
Percentage Receipts Balance of
Intercompany Loan
Agreement X
---------------------
Aggregate Outstanding
Principal Balance of
all outstanding
Intercompany Loans,
(but in each case taking into account any amounts
available to Funding in the Funding Principal Ledger to
make such payments) and provided always that
distributions shall only be made to the extent that such
payments shall not cause the Funding Share of the Trust
Property to fall below zero; and
(f) after making the distributions in (b), (c), (d) and (e), if such
Distribution Date is a Seller Share Event Distribution Date,
then the Cash Manager shall deposit such excess Principal
Receipts (the RETAINED PRINCIPAL RECEIPTS) in the Mortgages
Trustee GIC Account and make a corresponding credit to the
Principal Ledger.
11.3 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE
OCCURRENCE OF AN ASSET TRIGGER EVENT
After the occurrence of an Asset Trigger Event, all Principal Receipts
and any Retained Principal Receipts will be distributed by the Cash
Manager as follows:
(a) if the immediately preceding Distribution Date was a Seller
Share Event Distribution Date, all of the Retained Principal
Receipts to Funding until the Funding Share of the Trust
Property is zero; and then
(b) pro rata and pari passu between Funding and the Seller according
to the Current Funding Share Percentage of the Trust Property
and the Current Seller Share Percentage of the Trust Property
respectively (and, for the avoidance of doubt, such payments may
reduce the Current Seller Share to an amount less than the
Minimum Seller Share), until the Funding Share of the Trust
Property is zero.
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When the Funding Share of the Trust Property is zero, the remaining
Principal Receipts (if any) will be allocated to the Seller.
11.4 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE
OCCURRENCE OF A NON-ASSET TRIGGER EVENT
After the occurrence of a Non-Asset Trigger Event (where an Asset
Trigger Event has not occurred), all Principal Receipts and any Retained
Principal Receipts will be paid to Funding until the Funding Share of
the Trust Property is zero and will thereafter be paid to the Seller.
11.5 ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING ENTRY BY
FUNDING INTO A NEW TERM ADVANCE
If a New Issuer makes a New Term Advance to Funding pursuant to a New
Intercompany Loan Agreement, then the parties hereto shall amend the
terms of Clause 11 as required to reflect the repayment provisions of
that New Term Advance. If (with the consent of the Seller and Funding)
any New Issuer or New Issuers acquire a direct interest in the Trust
Property, the parties hereto shall amend the terms of this Deed as
required to reflect such acquisition by the New Issuer or New Issuers.
For the avoidance of doubt, in either case, the parties hereto shall
amend the terms of the Trigger Events if required to do so by the Rating
Agencies as a result of the issue of New Notes by any such New Issuer or
New Issuers, as the case may be.
12. ALLOCATION OF LOSSES
Subject as provided herein (and in particular, Clause 8), all Losses
sustained on the Loans during a Distribution Period shall be applied in
reducing pro rata both the Funding Share and the Seller Share on each
Relevant Distribution Date by multiplying the Losses in the relevant
Distribution Period by the Current Funding Share Percentage, (as
calculated on the immediately preceding Distribution Date), the product
of which shall be allocated to Funding (until the Funding Share is
zero), and the remainder of such Losses shall be allocated to the
Seller.
13. LEDGERS
The Mortgages Trustee shall maintain, or shall procure that there are
maintained, the following Mortgages Trustee Ledgers:
(a) the Principal Ledger, which shall record all receipts of
Principal Receipts and Retained Principal Receipts and
distribution of the same to Funding and the Seller;
(b) the Revenue Ledger, which shall record all receipts of Revenue
Receipts and distribution of the same to Funding and the Seller;
(c) the Losses Ledger, which shall record Losses in relation to the
Loans; and
(d) the Funding Share/Seller Share Ledger which shall record the
Current Funding Share, the Current Seller Share of the Trust
Property, the Current Funding Share Percentage and the Current
Seller Share Percentage.
14. COSTS AND EXPENSES OF THE MORTGAGES TRUSTEE
The Mortgages Trustee shall be entitled to charge and be remunerated for
the work undertaken by it as trustee of the trusts created by this Deed.
The remuneration shall be on such terms (if any) as the Mortgages
Trustee may from time to time agree with the Seller and
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Funding in writing. In default of such agreement, Funding and the Seller
shall indemnify the Mortgages Trustee from time to time with such
regularity as is reasonably agreed between the parties, of the
documentable costs and expenses directly and properly incurred by the
Mortgages Trustee in performing its obligations hereunder together with
any amounts in respect of Irrecoverable VAT incurred in respect of such
costs and expenses. The cost of such indemnity shall be paid in
accordance with the priority of payments set out in Clause 10.2 of this
Deed.
15. DIRECTIONS FROM BENEFICIARIES
15.1 SERVICING AGREEMENT AND CASH MANAGEMENT AGREEMENT
On the Initial Closing Date the Mortgages Trustee shall enter into the
Servicing Agreement and the Cash Management Agreement.
15.2 DIRECTIONS FROM BENEFICIARIES
Subject to Clause 15.3 below , the Mortgages Trustee covenants with the
Seller and Funding that the Mortgages Trustee shall take all necessary
steps and do everything which both Funding and the Seller (acting
together) may reasonably request or direct it to do in order to give
effect to the terms of this Deed or the other Transaction Documents to
which the Mortgages Trustee is a party.
15.3 Funding and the Seller covenant with each other that neither shall
direct or request the Mortgages Trustee to do any act or thing which
breaches the terms of, or is otherwise expressly dealt with (such that
the Mortgages Trustee has no discretion) by, any of the Transaction
Documents.
15.4 NO REQUIREMENT TO ACT
The Mortgages Trustee will not be bound and shall have no power to take
any proceedings, actions or steps under or in connection with any of
this Deed or the other Transaction Documents to which it is a party
unless:
(a) it shall have been directed to do so by the Beneficiaries or it
is required to do so under any express provision of this Deed or
the other Transaction Documents (but subject to Clause 15.2 in
respect of conflict of directions); and
(b) it shall have been indemnified to its satisfaction against all
liabilities, proceedings, claims and demands to which it may be
or become liable and all costs, charges and expenses which may
be incurred by it in connection therewith and the terms of such
indemnity may include the provision of a fighting fund,
non-recourse loan or other similar arrangement.
15.5 COVENANT OF THE MORTGAGES TRUSTEE
Subject to Clause 15.2, the Mortgages Trustee covenants with each of the
Seller and Funding to exercise all of its rights arising under the Trust
Property (including without limitation any rights of enforcement) for
the benefit of and on behalf of the Beneficiaries.
16. EARLY TERMINATION OF THE MORTGAGES TRUST
On giving not more than 61 nor less than 31 days' notice to Funding, the
Seller may pay to Funding the Termination Price in exchange for the
Funding Share of the Trust Property if the
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aggregate Outstanding Principal Balance under all Intercompany Loan
Agreements is at any time less than 10 per cent. of the aggregate
Outstanding Principal Balance of all Intercompany Loan Agreements as at
the respective drawdown dates thereof. Thereafter, the Mortgages Trustee
shall hold the Trust Property for the Seller absolutely, freed and
released from the Mortgages Trust.
17. TRANSFERS
17.1 FUNDING SHALL NOT ASSIGN
Subject to the right of Funding (or the Security Trustee or a Receiver
on its behalf) to sell the Funding Share of the Trust Property following
the service of an Intercompany Loan Enforcement Notice (which right is
hereby conferred), Funding covenants with the Seller that it shall not,
and shall not purport to, sell, assign, transfer, convey, charge,
declare a trust over, create any beneficial interest in, or otherwise
dispose of the Funding Share in the Trust Property, or any of Funding's
rights, title and interest or benefit in any of the Portfolio or the
Trust Property to a third party, other than pursuant to the terms of the
Transaction Documents (including for the avoidance of doubt, the Funding
Deed of Charge).
17.2 SELLER SHALL NOT ASSIGN
The Seller covenants with Funding that it shall not, and shall not
purport to, sell, assign, transfer, convey, charge, declare a trust
over, create any beneficial interest in, or otherwise dispose of the
Seller Share in the Trust Property or any of the Seller's rights, title
and interest or benefit in the Trust Property to a third party, other
than pursuant to the terms of the Transaction Documents.
18. COVENANTS OF THE MORTGAGES TRUSTEE
Save with the prior written consent of the Beneficiaries or as provided
in or envisaged by this Deed and the other Transaction Documents to
which the Mortgages Trustee is a party, the Mortgages Trustee shall not,
so long as it is acting as Mortgages Trustee hereunder:
(a) Negative Pledge
create or permit to subsist any mortgage, standard security,
pledge, lien, charge or other security interest whatsoever
(unless arising by operation of law), upon the whole or any part
of its assets (including any uncalled capital) or its
undertakings, present or future;
(b) Disposal of Assets
transfer, sell, lend, part with or otherwise dispose of, or deal
with, or grant any option or present or future right to acquire
any of its assets or undertakings or any interest, estate,
right, title or benefit therein or thereto or agree or attempt
or purport to do so;
(c) Equitable Interest
permit any person other than the Beneficiaries to have any
equitable or beneficial interest in any of its assets or
undertakings or any interest, estate, right, title or benefit
therein;
17
(d) Bank Accounts
have an interest in any bank account, other than as set out in
the Transaction Documents;
(e) Restrictions on Activities
carry on any business other than as described in this Deed and
the Mortgage Sale Agreement;
(f) Borrowings
incur any indebtedness in respect of borrowed money whatsoever
or give any guarantee or indemnity in respect of any such
indebtedness;
(g) Merger
consolidate or merge with any other person or convey or transfer
its properties or assets substantially as an entirety to any
other person;
(h) Employees or premises have any employees or premises or
subsidiaries;
(i) Further shares
issue any further shares; or
(j) United States activities
engage in any activities in the United States (directly or
through agents) or derive any income from United States sources
as determined under United States income tax principles or hold
any property if doing so would cause it to be engaged or deemed
to be engaged in a trade or business within the United States as
determined under United States tax principles.
19. POWER TO DELEGATE
19.1 POWER TO DELEGATE
Subject to Clause 19.2, the Mortgages Trustee may (notwithstanding any
rule of law or equity to the contrary) delegate (revocably or
irrevocably and for a limited or unlimited period of time) the
performance of all or any of its obligations and the exercise of all or
any of its powers under this Deed or imposed or conferred on it by law
or otherwise to any person or body of persons fluctuating in number
selected by it and any such delegation may be by power of attorney or in
such other manner as the Mortgages Trustee may think fit and may be made
upon such terms and conditions (including the power to sub-delegate) as
the Mortgages Trustee may think fit.
19.2 NO FURTHER APPOINTMENTS
Notwithstanding the provisions of Clause 19.1, the Mortgages Trustee
shall not appoint any agent, attorney or other delegate having power to
act in respect of the Trust Property unless it is directed in writing to
do so by the Beneficiaries. The appointment of any agent, attorney or
other delegate hereunder above shall terminate immediately upon the
occurrence of a Trigger Event.
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20. POWERS OF INVESTMENT
Save as expressly provided for in this Deed, the Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement, the
Mortgages Trustee shall have no further or other powers of investment
with respect to the Trust Property and neither the Trustee Investments
Act 1961 nor any other provision relating to trustee powers of
investment implied by statute or general law shall apply to the
Mortgages Trust and, for the avoidance of doubt, the statutory power to
accumulate income conferred on trustees by Section 31 of the Trustee Act
1925 is expressly excluded.
21. OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE
21.1 NO ACTION TO IMPAIR TRUST PROPERTY
Except for actions expressly authorised by this Deed, the Mortgages
Trustee shall take no action reasonably likely to impair the interests
of the Beneficiaries in any Trust Property now existing or hereafter
created or to impair the value of any Loan or its Related Security
subject to the Mortgages Trust.
21.2 LITIGATION
The Mortgages Trustee must not prosecute or defend any legal or other
proceedings anywhere in the world (at the cost of the Trust Property)
unless it obtains legal or other advice that it is in the interests of
the Beneficiaries to do so.
21.3 NO IMPLIED DUTIES
The duties and obligations of the Mortgages Trustee under the Mortgages
Trust shall be determined solely by the express provisions of this Deed
(but without prejudice to the duties and obligations of the Mortgages
Trustee under any of the other Transaction Documents). The Mortgages
Trustee shall not be liable under this Deed except for the performance
of such duties and obligations as shall be specifically set forth in
this Deed. No implied covenants or obligations shall be read into this
Deed against the Mortgages Trustee, and the permissible right of the
Mortgages Trustee to do things set out in this Deed shall not be
construed as a duty.
21.4 NO LIABILITY
Neither the Mortgages Trustee, Funding (in its capacity as a Beneficiary
hereunder) nor the Seller (in its capacity as a Beneficiary hereunder)
shall be liable to each other, in the absence of wilful default,
negligence or breach of the terms of this Deed, in respect of any loss
or damage which arises out of the exercise or attempted or purported
exercise or failure to exercise any of their respective powers.
21.5 RELIANCE ON CERTIFICATES
The Mortgages Trustee may rely on and shall be protected in acting on,
or in refraining from acting in accordance with, any resolution,
officer's certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to the Transaction
Documents by the proper party or parties.
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21.6 RELIANCE ON THIRD PARTIES
The Mortgages Trustee may, in relation to these presents, act on the
opinion or advice of or a certificate or any information obtained from
any lawyer, banker, valuer, broker, accountant, financial adviser,
securities dealer, merchant bank, computer consultant or other expert in
the United Kingdom or elsewhere and shall not, provided that it shall
not have acted fraudulently or in breach of any of the provisions of the
Transaction Documents, be responsible for any loss occasioned by so
acting. Any such opinion, advice, certificate or information may be sent
or obtained by letter, telemessage, telex, cable or facsimile device and
the Mortgages Trustee shall not be liable for acting on any opinion,
advice, certificate or information purporting to be so conveyed although
the same shall contain some error or shall not be authentic, provided
that such error or lack of authenticity shall not be manifest.
22. NO RETIREMENT OF MORTGAGES TRUSTEE
22.1 NO RETIREMENT
The Mortgages Trustee shall not, and shall not purport to, retire as the
trustee of the Mortgages Trust or appoint any additional trustee of the
Mortgages Trust and shall have no power to retire or appoint any
additional trustee under the Trustee Xxx 0000 or otherwise.
22.2 NO REPLACEMENT
Neither the Seller nor Funding shall at any time remove or purport to
remove and/or replace the Mortgages Trustee as the trustee of the
Mortgages Trust.
22.3 NO TERMINATION
Prior to the payment by Funding of all amounts owing under the
Intercompany Loan Agreements and under the Transaction Documents,
neither the Seller nor Funding shall at any time, except in accordance
with the provisions of Clauses 16 and 23, terminate or purport to
terminate the Mortgages Trust and, in particular, but without prejudice
to the generality of the foregoing, the Seller and Funding shall not in
reliance on their absolute beneficial interests in the Trust Property
call for the transfer to them or vesting in them of the legal estate in
all or any part of the Trust Property.
23. TERMINATION
Subject to Clause 16, the Mortgages Trust shall terminate in respect of
the Trust Property (if any then remains) upon the later to occur of (i)
the date on which the Funding Share of the Trust Property is zero, and
(ii) any other date agreed in writing by Funding and the Seller.
24. FURTHER ASSURANCES
The parties agree that they will co-operate fully to do all such further
acts and things and execute any further documents as may be necessary or
desirable to give full effect to the arrangements contemplated by this
Deed.
25. AMENDMENTS, ETC.
25.1 AMENDMENTS AND WAIVERS
Without prejudice to Clause 28 of the Funding Deed of Charge, no
amendment or waiver of any provision of this Deed nor consent to any
departure by any of the parties therefrom shall
20
in any event be effective unless the same shall be in writing and signed
by each of the parties hereto. In the case of a waiver or consent, such
waiver or consent shall be effective only in the specific instance and
as against the party or parties giving it for the specific purpose for
which it is given.
25.2 ENTIRE AGREEMENT
This Deed contains a final and complete integration of all prior
expressions by the parties with respect to the subject matter of this
Deed and constitutes the entire agreement among the parties with respect
to the subject matter of this Deed superseding all prior oral or written
understandings other than the other Transaction Documents.
26. NON PETITION COVENANT
The Seller hereby agrees that it shall not institute against either
Funding or the Mortgages Trustee any winding-up, administration,
insolvency or similar proceedings so long as any sum is outstanding
under any Intercompany Loan Agreement and for one year plus one day
since the last day on which any such sum was outstanding.
27. NO PARTNERSHIP OR AGENCY
Nothing in this Deed shall be taken to constitute or create a
partnership between any of the parties to this Deed or to make or
appoint the Seller the agent of Funding (or vice versa).
28. CALCULATIONS
In the absence of manifest error, any determination or calculation or
performance by or on behalf of the Mortgages Trustee in connection with
the provisions of this Deed shall be deemed to be conclusive.
29. NO WAIVER; REMEDIES
No failure on the part of any party to this Deed to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise of any
other right or remedy. The remedies in this Deed are cumulative and not
exclusive of any remedies provided by law.
30. SEVERABILITY
Where any provision in or obligation under this Deed shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations under this
Deed, or of such provision or obligation in any other jurisdiction,
shall not be affected or impaired thereby.
31. CONFIDENTIALITY
31.1 GENERAL OBLIGATION OF CONFIDENTIALITY
Unless otherwise required by applicable law, and subject to Clause 31.2
below , each of the parties agrees to maintain the confidentiality of
this Deed in its communications with third parties and otherwise. None
of the parties shall disclose to any person any information relating to
the business, finances or other matters of a confidential nature of or
relating to any
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other party to this Deed or any of the Transaction Documents which it
may have obtained as a result of having entered into this Deed or
otherwise.
31.2 EXCEPTIONS
The provisions of Clause 31.1 above shall not apply:
(a) to the disclosure of any information to any person who is a
party to any of the Transaction Documents as expressly permitted
by the Transaction Documents;
(b) to the disclosure of any information which is or becomes public
knowledge otherwise than as a result of the wrongful conduct of
the recipient;
(c) to the extent that the recipient is required to disclose the
same pursuant to any law or order of any court or pursuant to
any direction or requirement (whether or not having the force of
law) of any central bank or any governmental or other regulatory
or Taxation authority;
(d) to the disclosure of any information to professional advisers
who receive the same under a duty of confidentiality;
(e) to the disclosure of any information with the consent of the
parties hereto;
(f) to the disclosure to the Rating Agencies or any of them of such
information as may be requested by any of them for the purposes
of setting or reviewing the rating assigned to the Notes (or any
of them), provided that no information which would disclose the
identity of a Borrower shall be disclosed to the Rating Agencies
or any of them;
(g) to the disclosure of any information disclosed to a prospective
assignee of Funding (provided that it is disclosed on the basis
that the recipient will hold it confidential); or
(h) to any disclosure for the purposes of collecting in or enforcing
the Trust Property or any of it.
32. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Deed do not intend that any term of this Deed should
be enforced, by virtue of the Contracts (Rights of Third Parties) Xxx
0000, by any person who is not a party to this Deed.
33. ADDRESSES FOR NOTICES
Any notices to be given pursuant to this Deed to any of the parties
hereto shall be sufficiently served if sent by prepaid first class post,
by hand or facsimile transmission and shall be deemed to be given (in
the case of facsimile transmission) when despatched, (where delivered by
hand) on the day of delivery if delivered before 17.00 hours on a London
Business Day or on the next London Business Day if delivered thereafter
or (in the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
(a) in the case of the Seller, to Abbey National plc, at Abbey
National House, 0 Xxxxxx Xxxxxx, Xxxxxx'x Xxxxx, Xxxxxx XX0 0XX
(facsimile number (00) 00 0000 0000) for the attention of the
Company Secretary with a copy to Abbey National plc, x/x Xxxxx
00
Xxxxx (XXX 126), 000 Xxxxxxx Xxxx Xxxx, Xxxxxx Xxxxxx XX0 0XX
(facsimile number (00) 0000 000 000) for the attention of
Securitisation Team, Consumer Risk;
(b) in the case of the Mortgages Trustee to Xxxxxx Trustees Limited,
c/o Abbey National plc, Abbey National House, 0 Xxxxxx Xxxxxx,
Xxxxxx'x Xxxxx, Xxxxxx XX0 0XX (facsimile number (44) 20 7756
5627) for the attention of the Company Secretary with a copy to
Abbey National plc, c/o Abbey House (AAM 126), 000 Xxxxxxx Xxxx
Xxxx, Xxxxxx Xxxxxx XX0 0XX (facsimile number (00) 0000 000 000)
for the attention of Securitisation Team, Consumer Risk;
(c) in the case of Funding, to Xxxxxx Funding Limited, c/o Abbey
National plc, Abbey National House, 0 Xxxxxx Xxxxxx, Xxxxxx'x
Xxxxx, Xxxxxx XX0 0XX (facsimile number (00) 00 0000 0000) for
the attention of the Company Secretary with a copy to Abbey
National plc, c/o Abbey House (AAM 126), 000 Xxxxxxx Xxxx Xxxx,
Xxxxxx Xxxxxx XX0 0XX (facsimile number (00) 0000 000 000) for
the attention of Securitisation Team, Consumer Risk;
(d) in each case with a copy to the Security Trustee, for the
attention of JPMorgan Chase Bank, London Branch, Trinity Tower,
9 Xxxxxx Xxxx Xxxxxx, Xxxxxx X0X 0XX (facsimile number (44) 20
7777 5410) for the attention of The Manager, Trust
Administration,
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by any
party to the others by written notice in accordance with the provisions
of this Clause 33.
34. GOVERNING LAW AND SUBMISSION TO JURISDICTION
34.1 GOVERNING LAW
This Deed is governed by, and shall be construed in accordance with,
English law.
34.2 SUBMISSION TO JURISDICTION
Each party to this Deed hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts in any action or proceeding arising
out of or relating to this Deed, and hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and
determined by such courts. Each party to this Deed hereby irrevocably
waives, to the fullest extent it may possibly do so, any defence or
claim that the English courts are an inconvenient forum for the
maintenance or hearing of such action or proceeding.
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Exclusion of Trustee Xxx 0000
Xxx Xxxxxxx Xxx 0000 is hereby excluded to the maximum extent
permissible, to the intent that it shall not apply to the trusts
constituted hereunder and that the parties shall be in the same position
as they would be had that Act not come into force.
IN WITNESS of which this Deed has been duly executed and delivered by the
parties hereto as a deed which has been delivered on the date first appearing
on page one.
EXECUTED as a DEED by )
XXXXXX FUNDING )
LIMITED as Beneficiary )
acting by )
EXECUTED as a DEED by )
XXXXXX TRUSTEES )
LIMITED as Mortgages Trustee )
acting by )
EXECUTED as a DEED by )
SPV MANAGEMENT )
LIMITED as Settlor )
acting by )
SIGNED as a DEED )
by: )
as attorney for and on behalf of )
ABBEY NATIONAL PLC as )
Seller, Cash Manager and Beneficiary )
under a power of attorney dated )
in the presence of: )
Signature of witness:
Name of witness:
Address of witness:
Occupation of witness:
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