Exhibit 4.10
NORTHERN ROCK PLC
as Administrator
- and -
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
- and -
NORTHERN ROCK PLC
as Seller
GRANITE FINANCE FUNDING LIMITED
as Beneficiary
- and -
THE BANK OF NEW YORK
as Security Trustee
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FIRST AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
DATED 28 SEPTEMBER 2001
which amends and restates the
ADMINISTRATION AGREEMENT
DATED 26 MARCH 2001
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SIDLEY XXXXXX XXXXX & XXXX
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF:
CONTENTS
CLAUSE PAGE NO.
1. Definitions and Interpretation.......................................2
2. Appointment of Administrator.........................................2
3. The Administration Services..........................................3
4. Interest Rates.......................................................6
5. Administration of Mortgages..........................................9
6. No Liability........................................................12
7. New Mortgage Loans..................................................12
8. Product Switching and Further Advances..............................12
9. Redemption of Mortgages.............................................13
10. Powers of Attorney..................................................13
11. Costs and Expenses..................................................14
12. Information.........................................................14
13. Remuneration........................................................16
14. Insurances..........................................................17
15. Title Deeds.........................................................19
16. Data Protection.....................................................19
17. Covenants and Representations and Warranties of Administrator.......20
18. Services Non-exclusive..............................................21
19. Termination.........................................................22
20. Further Assurances..................................................25
21. Miscellaneous.......................................................25
22. Confidentiality.....................................................26
23. No Partnership......................................................27
24. Assignment..........................................................27
25. Security Trustee; Authorised Third Party............................28
26. New Intercompany Loan Agreements....................................28
27. Non Petition Covenant; Limited Recourse.............................28
28. Amendments and Waiver...............................................29
29. Notices.............................................................30
30. Third Party Rights..................................................31
31. Execution in Counterparts; Severability.............................31
32. Governing Law and Submission to Jurisdiction........................31
33. Process Agent.......................................................31
34. Appropriate Forum...................................................32
SCHEDULE 1 THE SERVICES..................................................33
SCHEDULE 2 FORM OF INVESTORS' QUARTERLY REPORT...........................34
SCHEDULE 3 ADMINISTRATOR REPRESENTATIONS AND WARRANTIES..................38
SCHEDULE 4 AUTHORISED THIRD PARTY.......................................40
THIS FIRST AMENDED AND RESTATED ADMINISTRATION AGREEMENT DATED 28 SEPTEMBER 2001
AMENDS AND RESTATES THE ADMINISTRATION 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 administrator of the Mortgage Loans and the Related Security
(the "ADMINISTRATOR") which expression shall include such other person as
may from time to time be appointed as administrator of the Mortgage
Portfolio pursuant to this Agreement);
(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 (the "MORTGAGES TRUSTEE");
(3) 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 of the Mortgage Loans (the "SELLER");
(4) 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 BR0051916) at 0xx Xxxxx, 00 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX ("FUNDING" and together with the
Seller, the "BENEFICIARIES"); and
(5) THE BANK OF NEW YORK, whose principal office is at One Canada Square, 00xx
Xxxxx, Xxxxxx X00 0XX, in its capacity as trustee (the "SECURITY
TRUSTEE"), which expression shall include such company and all other
persons or companies for the time being acting as the trustee or trustees
under the Funding Deed of Charge).
WHEREAS:
(A) The Administrator carries on the business of, inter alia, administering
mortgage loans secured on residential properties within the United
Kingdom.
(B) By the Mortgage Sale Agreement, the Seller has agreed to assign the
Mortgage Loans and Related Security comprised in the Initial Mortgage
Portfolio to the Mortgages Trustee. The Mortgages Trustee shall hold the
Initial Mortgage Portfolio together with any New Mortgage Portfolio on
trust for Funding and the Seller pursuant to the terms of the Mortgages
Trust Deed.
(C) The Administrator is willing to administer the Mortgage Loans on behalf of
the Mortgages Trustee and to provide certain other administration and
management services to the Mortgages Trustee, the Seller and Funding on
the terms and subject to the conditions contained in this Agreement in
relation to, inter alia, the Mortgage Loans and Related Security assigned
to the Mortgages Trustee by the Seller.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS: The Master Definitions Schedule signed for the purposes of
identification by Xxxxx & Xxxx and Xxxxxxxx Chance Limited Liability
Partnership on 26 March 2001 (as the same may be amended, varied or
supplemented from time to time with the consent of each of the parties
hereto) is expressly and specifically incorporated into this Agreement
and, accordingly, the expressions defined in the Master Definitions
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 Master Definitions Schedule.
1.2 EXERCISE OF DISCRETION: Any reference in this Agreement to any discretion,
power or right on the part of the Mortgages Trustee shall be as exercised
by the Mortgages Trustee only as directed by the Beneficiaries but subject
in each case to the provisions of the Mortgages Trust Deed.
1.3 SCHEDULES: For the avoidance of doubt, the parties hereto agree that the
Schedules attached to this Agreement shall form a part of this Agreement,
and the provisions of this Agreement shall be construed in accordance with
such Schedules.
2. APPOINTMENT OF ADMINISTRATOR
2.1 APPOINTMENT: Subject to Clause 4.5 herein, and until termination pursuant
to Clause 19 herein (Termination), the Mortgages Trustee hereby appoints
the Administrator to administer the Mortgages Loans on its behalf, and
each of the Mortgage Trustee, the Seller and Funding (according to their
respective estates and interests) each hereby appoints the Administrator
as its lawful agent on their respective behalves to provide certain other
administration and management services and to exercise their respective
rights, powers and discretions, and to perform their respective duties,
under and in relation to the Mortgage Loans and their Related Security.
The Administrator in each case hereby accepts such appointment on the
terms and subject to the conditions of this Agreement. The Security
Trustee consents to the appointment of the Administrator on the terms of
and subject to the conditions of this Agreement.
2.2 POWER AND AUTHORITY: For the avoidance of doubt and in connection with the
rights, powers and discretions conferred under Clause 2.1 herein, during
the continuance of its appointment hereunder, the Administrator shall,
subject to the terms and conditions of this Agreement, the Mortgage
Conditions, the Mortgage Sale Agreement and the Mortgages Trust Deed, have
the full power, authority and right to do or cause to be done any and all
things which it reasonably considers necessary, convenient or incidental
to the administration of the Mortgage Loans and their Related Security or
the exercise of such rights, powers and discretions, provided however that
neither the Mortgages Trustee nor Funding nor their respective directors
shall be required or obliged at any time to enter into any transaction or
to comply with any directions which the Administrator may give with
respect to the operating and financial policies of the Mortgages Trustee
or Funding and the Administrator hereby acknowledges that all powers to
determine such policies (including the determination of whether or not
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any particular policy is for the benefit of the Mortgages Trustee or
Funding) are, and shall at all times remain, vested, as the case may be,
in the Mortgages Trustee and/or Funding (and their respective directors)
and none of the provisions of this Agreement shall be construed in a
manner inconsistent with this proviso.
2.3 APPOINTMENT CONDITIONAL: The appointment pursuant to Clause 2.1 herein is
conditional upon the issue of the First Issuer Notes having taken place
and shall take effect upon and from the Initial Closing Date automatically
without any further action on the part of any person PROVIDED THAT if the
issue of the First Issuer Notes has not occurred by 30 April 2001, or such
later date as the First Issuer and the Lead Manager may agree, this
Agreement shall cease to be of further effect.
3. THE ADMINISTRATION SERVICES
3.1 GENERAL: The duty of the Administrator shall be to provide the services
set out in this Agreement including Schedule 1 (the "SERVICES").
3.2 SUB-CONTRACTS:
(a) The Administrator may sub-contract or delegate the performance of
all or any of its powers and obligations under this Agreement,
provided that (but subject to Clause 3.2(b) herein):
(i) the prior written consent of the Mortgages Trustee and Funding
to the proposed arrangement (including, if Funding considers
it necessary after consulting with the Security Trustee,
approving any contract which sets out the terms on which such
arrangements are to be made) has been obtained, the Security
Trustee has been consulted and notification has been given to
each of the Rating Agencies;
(ii) where the arrangements involve the custody or control of any
Mortgage Loan Files and/or Title Deeds relating to the
Mortgage Portfolio for the purpose of performing any delegated
Services, the sub-contractor or delegate has executed an
acknowledgement in writing acceptable to Funding and the
Security Trustee to the effect that any such Mortgage Loan
Files and/or Title Deeds are and will be held to the order of
the Mortgages Trustee (as trustee for the Beneficiaries);
(iii) where the arrangements involve or may involve the receipt by
the sub-contractor or delegate of monies belonging to the
Beneficiaries which, in accordance with this Agreement, are to
be paid into the relevant Collection Account, the
sub-contractor or delegate has executed a declaration in
writing acceptable to the Beneficiaries that any such monies
held by it or to its order are held on trust for the
Beneficiaries and will be paid forthwith into the relevant
Collection Account in accordance with the terms of the
Mortgages Trust Deed;
(iv) any such sub-contractor or delegate has executed a written
waiver of any Security Interest arising in connection with
such delegated
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Services (to the extent that such Security Interest relates to
the Mortgage Portfolio or any amount referred to in (iii)
above); and
(v) neither the Mortgages Trustee, the Security Trustee nor the
Beneficiaries shall have any liability for any costs, charges
or expenses payable to or incurred by such sub-contractor or
delegate or arising from the entering into, the continuance or
the termination of any such arrangement.
(b) The provisos to Clause 3.2(a) (i), (ii) and (iii) herein shall not
apply:
(i) to the engagement by the Administrator of:
(1) any receiver, solicitor, insurance broker, valuer,
surveyor, accountant, estate agent, insolvency
practitioner, auctioneer, bailiff, debt counselor,
tracing agent, property management agent, licensed
conveyancer or other professional adviser acting as
such; or
(2) any locksmith, builder or other contractor acting as
such in relation to a Mortgaged Property, in any such
case being a person or persons whom the Administrator
would be willing to appoint in respect of its own
mortgages in connection with the performance by the
Administrator of any of its obligations or functions or
in connection with the exercise of its powers under this
Agreement; or
(ii) to any delegation to any wholly-owned subsidiary of the Seller
from time to time.
(c) The Mortgages Trustee and/or Funding and the Security Trustee may
require the Administrator to assign to the Mortgages Trustee any
rights which the Administrator may have against any sub-contractor
or delegate arising from the performance of services by such person
in association with any matter contemplated by this Agreement and
the Administrator acknowledges that such rights assigned to the
Mortgages Trustee will be exercised by the Mortgages Trustee as
trustee for the Beneficiaries subject to the terms of the Mortgages
Trust Deed.
(d) Notwithstanding any sub-contracting or delegation of the performance
of the Administrator's obligations under this Agreement:
(i) the Administrator shall not thereby be released or discharged
from any liability hereunder;
(ii) the Administrator shall remain responsible for the performance
of the obligations of the Administrator under this Agreement;
(iii) the performance or non-performance or the manner of
performance of any sub-contractor or delegate of any of the
Services shall not affect the Administrator's obligations
under this Agreement;
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(iv) any breach in the performance of the Services by any
sub-contractor or delegate shall, subject to the Administrator
being entitled for a period of twenty (20) Business Days from
receipt of notice of the breach to remedy such breach by any
sub-contractor or delegate, be treated as a breach of this
Agreement by the Administrator; and
(v) the Security Trustee shall have no liability for any act or
omission of the sub-contractor or delegate and shall have no
responsibility for monitoring or investigating the suitability
of any such sub-contractor or delegate.
3.3 NOTICES ETC.
(a) Within fifteen (15) days after the Initial Closing Date, the
Administrator will:
(i) on behalf of the Mortgages Trustee (at the direction of the
Beneficiaries or with their consent), give to third parties
such notices as any of the Beneficiaries are required to give
pursuant to the Mortgage Sale Agreement; and
(ii) submit for registration at the Companies Registry a duly
completed Form 395 and original executed copy of the First
Issuer Deed of Charge pursuant to Chapter 1 of Part XII of the
Companies Xxx 0000,
and in each case, the Administrator shall take all reasonable steps
to ensure the return by the relevant recipient of the duplicate
notices of assignment by way of acknowledgement thereof.
(b) Promptly upon request by Funding and the Security Trustee, the
Administrator shall procure that any notices permitted to be given
by the Mortgages Trustee under Clause 6.4 (Prior to Completion) of
the Mortgage Sale Agreement are so given by the Administrator on the
Mortgages Trustee's behalf.
3.4 LIABILITY OF ADMINISTRATOR:
(a) The Administrator shall indemnify each of the Mortgages Trustee and
the Beneficiaries on demand on an after-tax basis for any loss,
liability, claim, expense or damage suffered or incurred by either
of them in respect of the negligence or wilful default of the
Administrator in carrying out its functions as Administrator under
this Agreement or the other Transaction Documents or as a result of
a breach by the Administrator of the terms and provisions of this
Agreement or the other Transaction Documents in relation to such
functions.
(b) For the avoidance of doubt, the Administrator shall not be liable in
respect of any loss, liability, claim, expense or damage suffered or
incurred by the Mortgages Trustee and/or the Beneficiaries and/or
any other person as a result of the proper performance of the
Services by the Administrator save where such loss, liability,
claim, expense or damage is suffered or incurred as a result of any
negligence or wilful default of the Administrator or as a result of
a breach by the Administrator of the terms and provisions of this
Agreement or the other Transaction Documents in relation to such
functions.
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(c) Any indemnification under this Clause 3.4 in respect of loss
suffered by the Beneficiaries shall be paid for by reducing the
Seller Share of the Trust Property by an amount equal to the
relevant loss incurred by the Beneficiaries in accordance with
Clause 8.4 (Adjustments to Trust Property) of the Mortgages Trust
Deed and Schedule 2 to the Cash Management Agreement.
3.5 PERFECTION OF MORTGAGES TRUSTEE'S AND BENEFICIARIES' TITLE TO THE MORTGAGE
LOANS
Subject to Clause 6 of the Mortgage Sale Agreement:
(a) upon the receipt by the Seller of a written request from the
Mortgages Trustee, Funding or the Security Trustee to execute
transfers pursuant to Clause 6.2 of the Mortgage Sale Agreement, the
Administrator shall execute or procure the execution of such
transfers on behalf of the Seller or shall provide sufficient
information to enable the Mortgages Trustee, Funding or the Security
Trustee to do so; and
(b) upon the Seller being required to do so by the Mortgages Trustee,
Funding or the Security Trustee pursuant to Clause 6.1 of the
Mortgage Sale Agreement, the Administrator shall do all or any of
the acts, matters or things referred to in Clauses 6.2 and 6.3 of
the Mortgage Sale Agreement.
4. INTEREST RATES
4.1 DETERMINATION OF INTEREST RATES: Subject to the provisions of applicable
law and regulations and any regulatory undertakings binding on the
Administrator or the Issuer from time to time and subject to the following
provisions of this Clause 4, the Mortgages Trustee and each of the
Beneficiaries each hereby grants the Administrator full right, liberty and
authority from time to time to determine:
(a) in accordance with the applicable Mortgage Conditions, Mortgage
Terms and the Base Rate Pledge, the Standard Variable Rate
chargeable to Borrowers from time to time; and
(b) the Existing Borrowers' Re-Fix Rate in accordance with Clause 4.4
herein.
In exercising such right, liberty and authority the Administrator
undertakes to each of the other parties to this Agreement that it shall
not at any time set or maintain the Standard Variable Rate at a rate which
is higher than the then prevailing Standard Variable Rate offered by the
Seller, unless the Administrator is required to do so pursuant to Clause
4.3 herein, and, subject to that requirement, that it shall not change the
Standard Variable Rate save for the same reasons as the Seller was
entitled, under the Mortgage Conditions, to change the then prevailing
Standard Variable Rate offered by the Seller prior to the assignment to
the Mortgages Trustee of the Mortgage Loans comprised in the Mortgage
Portfolio and their Related Security. Each of the Issuer and the Security
Trustee shall be bound by any Mortgage Rates (including the Existing
Borrowers' Re-Fix Rate) determined by the Administrator in accordance with
this Clause 4.
4.2 NOTIFICATION TO BORROWERS: The Administrator shall take all steps
necessary pursuant to the relevant Mortgage Conditions or applicable law
to bring each change in the
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Standard Variable Rate and any consequent changes in Monthly Payments to
the attention of the relevant Borrowers and shall, as soon as reasonably
practicable after any change in the Standard Variable Rate, provide
details of such change to each of the Mortgages Trustee, the Security
Trustee and the Beneficiaries, and shall, upon receipt of a request from
any of such parties, notify such requesting party of any changes in the
Monthly Payments in relation to the Mortgage Loans.
4.3 INTEREST RATE SHORTFALL:
(a) On each Payment Date the Administrator shall determine, having
regard to:
(i) the income which Funding would expect to receive during the
next succeeding Interest Period;
(ii) the Standard Variable Rate in respect of the Mortgage Loans
which the Administrator proposes to set under this Clause 4;
and
(iii) the other resources available to Funding including the Funding
Reserve Fund and amounts standing to the credit of any Issuer
Reserve Fund and/or any Issuer Liquidity Reserve Fund,
whether Funding would receive an amount of income during that
Interest Period which when aggregated with the funds otherwise
available to it is less than the amount which is the aggregate of
(1) the amount of interest which will be payable by Funding in order
to fund (whether by payment to a swap provider or otherwise) the
amount of interest payable in respect of the Class A Notes of the
First Issuer (and the highest ranking class of notes of any New
Issuer, if any) and all amounts which rank in priority thereto on
the Payment Date occurring at the end of such Interest Period, and
(2) all other amounts payable by Funding which rank in priority to
or pari passu with interest due on the First Issuer Intercompany
Loan in respect of interest which is payable on the Class A Notes of
the First Issuer (and any New Intercompany Loan, if any, in respect
of interest which is payable by any New Issuer on the highest rated
class of Notes issued by such New Issuer, if any) (the amount (if
any) by which it is less being the "INTEREST RATE SHORTFALL").
(b) If the Administrator determines that there will be an Interest Rate
Shortfall, it will within one (1) London Business Day of such
determination give written notice thereof to the Mortgages Trustee,
Funding and the Security Trustee of such Interest Rate Shortfall and
of the Standard Variable Rate which would, in the Administrator's
opinion, need to be set in order for no Interest Rate Shortfall to
arise, having regard to the obligations of Funding under all
Intercompany Loans.
(c) If the Mortgages Trustee, Funding and/or the Security Trustee notify
the Administrator that, having regard to the obligations of Funding,
the Standard Variable Rate should be increased (which shall be the
same rate as previously notified to the Mortgages Trustee, Funding
and the Security Trustee in accordance with Clause 4.3(b)), the
Administrator, as agent for and on behalf of the Mortgages Trustee,
shall take all steps which are necessary, including publishing any
notice which is required in accordance with the Mortgage
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Terms, to
effect such change in the Standard Variable Rate on the date(s)
specified in the notice referred to in Clause 4.3(b) herein.
4.4 EXISTING BORROWERS' RE-FIX RATE:
(a) The Administrator shall, in relation to each Fixed Rate Mortgage
Loan, serve on the Seller as agent for and on behalf of, inter alia,
the Mortgages Trustee and the Beneficiaries the notice referred to
in Clause 8.6(a) of the Mortgage Sale Agreement sixty (60) days
before the expiry of the initial fixed rate period (as defined in
Clause 8.6(a) of the Mortgage Sale Agreement) applicable to that
Fixed Rate Mortgage Loan.
(b) If Clause 8.6(b) of the Mortgage Sale Agreement applies to any Fixed
Rate Mortgage Loan, the Administrator shall take all steps which are
necessary to perform the obligations of the Seller and exercise the
rights under such Clause.
(c) The Administrator shall, whenever Clause 8.6(c) of the Mortgage Sale
Agreement applies to a Fixed Rate Mortgage Loan, determine (after
consultation with the Basis Rate Swap Provider, the Currency Swap
Provider, and any other swap provider the Administrator (acting
reasonably) determines appropriate) the rate (and terms) upon which
the Existing Borrowers' Re-Fix Rate should be set having regard to
the interests of the Basis Rate Swap Provider and the Currency Swap
Provider (except to the extent that the Administrator believes that
the interests of either of the Basis Rate Swap Provider or the
Currency Swap Provider are materially prejudicial to the interests
of the Noteholders). The Administrator will give written notice of
such determination within one Business Day thereof to the Mortgages
Trustee and the Beneficiaries recommending what the Existing
Borrowers' Re-Fix Rate should be and the terms at which it should be
offered, having regard to the interests of the Basis Rate Swap
Provider and the Currency Swap Provider (except to the extent that
the Administrator believes that the interests of either of the Basis
Rate Swap Provider or the Currency Swap Provider are materially
prejudicial to the interests of the Noteholders). The Administrator
will solicit quotations on rates from each of (i) the Mortgages
Trustee, (ii) Funding, and (iii) other trustees for re-fixed
mortgage loans in relation to other outstanding securitisations of
the Seller (if any), and shall notify the Mortgages Trustee and the
Beneficiaries as to the higher of (x) any rate provided by any of
the parties in (i) through (iii) herein and (y) current rates for
re-fixed mortgage loans (not included in any Mortgage Portfolio) in
relation to other Mortgage Loans of the Administrator. If the
Mortgages Trustee agrees in writing with such recommendation, or
(whether or not it has received the Administrator's recommendation)
requires alternative rates and/or terms (such agreement or
requirement being the "EBRR DETERMINATION") the Administrator shall
immediately notify the Seller and the First Issuer (and any New
Issuer) of the EBRR Determination, and take all steps which are
necessary to enable the First Issuer (and any New Issuer) to enter
into the relevant swap agreement either with the Basis Rate Swap
Provider or the Currency Swap Provider (or other swap provider whose
appointment would not adversely affect the then current ratings of
the Notes) at the rate (and on the terms) required in accordance
with the EBRR Determination (the "REQUIRED RATE AND TERMS"). Nothing
in this Clause 4.4(c) shall prevent the Mortgages Trustee from
setting
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the Existing Borrowers' Re-Fix Rate in accordance with its powers
under the Mortgage Sale Agreement.
(d) If Clause 8.6 of the Mortgage Sale Agreement applies to any Fixed
Rate Mortgage Loan, and the Seller fails to set the Existing
Borrowers' Re-Fix Rate immediately upon being required to do so in
accordance with the Required Rate and Terms or otherwise to perform
its obligations under Clause 8.6(c) of the Mortgage Sale Agreement,
the Administrator as attorney for the Mortgages Trustee and the
Beneficiaries shall set the Existing Borrowers' Re-Fix Rate on the
Required Rate and Terms.
4.5 TERMINATION OF AUTHORITY: The Mortgages Trustee and/or Funding and the
Security Trustee may terminate the authority of the Administrator under
Clauses 4.1 and 4.3 herein to determine either of the Mortgage Rate(s) or
Existing Borrowers' Re-Fix Rate on or after the occurrence of a
Termination Event pursuant to Clause 19 herein, in which case the
Mortgages Trustee shall set the Mortgage Rate(s) or Existing Borrowers'
Re-Fix Rate, as applicable, in accordance with this Clause 4.
5. ADMINISTRATION OF MORTGAGES
5.1 COLLECTION OF PAYMENTS:
(a) For the purposes of collecting amounts due from any Borrower under a
Mortgage Loan, where such Borrower makes a Monthly Payment by way of
Direct Debit the Administrator will, unless otherwise agreed in
writing with the Beneficiaries:
(i) act as collecting agent for the Beneficiaries under the Direct
Debiting Scheme;
(ii) comply with the obligations on its part set out in the Bank
Account Agreement including, without limitation, the specific
provisions relating to the collection of monies set out in
Clause 4 of the Bank Account Agreement;
(iii) comply in all material respects with the requirements from
time to time of the Direct Debiting Scheme; and;
(iv) using its reasonable endeavours, credit any Monthly Payment
made by a Borrower by way of Direct Debit to the relevant
Collection Account within one (1) London Business Day of
receipt (and in any event within three (3) London Business
Days of such receipt) into the relevant Collection Account.
(b) The Administrator may agree with a Borrower that the Direct Debiting
Scheme shall not apply to Monthly Payments to be made by such
Borrower, provided that (i) alternative payment arrangements are
made which are intended to ensure the timely making of Monthly
Payments due from the Borrower to the Mortgages Trustee, and (ii)
the change in arrangements was made at the instigation of the
Borrower or by the Administrator in accordance with the procedures
which would be adopted by a reasonable and prudent
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mortgage lender. The Administrator shall, using its reasonable
endeavours, credit Monthly Payments made by a Borrower under an
alternative payment arrangement as follows to the relevant
Collection Account:
(i) by standing order, by close of business on the second (2nd)
London Business Day following the day on which such amount is
received or credited by the Administrator;
(ii) by payment of cash, transfer payment from another account of
the Seller or check where reference to the relevant Borrower
is provided or payments made by way of paying-in book, by
close of business on the London Business Day which immediately
follows the day on which such amount is received or credited
by the Administrator; and
(iii) in the case of any payment by check where a reference to the
relevant Borrower is not provided, by close of business on the
next London Business Day after notification from the Operating
Banks of the identity of the Borrower;
(c) provided however, that in any event the Administrator shall credit
Monthly Payments made by a Borrower under an alternative payment
arrangement within three (3) London Business Days of such receipt.
(d) The Administrator may, notwithstanding the proviso to Clause 5.2(b)
herein, agree such procedures for the payment by a Borrower of (i)
overdue amounts and (ii) amounts payable on redemption of a Mortgage
in whole or in part other than through the Direct Debiting Scheme as
would be agreed by a reasonable and prudent mortgage lender.
(e) Where a Borrower permits a Direct Debit to be made to his bank
account, the Administrator will endeavour to procure that such
Borrower maintains a valid and effective mandate relating to such
Direct Debit in relation to each Monthly Payment due from that
Borrower, provided that in any case where a Borrower will not permit
a Direct Debit to be made to his bank account the Administrator will
endeavour to make alternative arrangements acceptable to a
reasonable and prudent mortgage lender so that such Borrower
nevertheless pays each Monthly Payment on the due date.
(f) In the event that the Bankers Automated Clearing System ceases to
operate for any reason the Administrator will use reasonable
endeavours to make alternative arrangements for the use of the
back-up systems available to each Account Bank.
5.2 ADMINISTRATION AND ENFORCEMENT OF MORTGAGES:
(a) The Mortgages Trustee as trustee for the Beneficiaries hereby
directs the Administrator to administer the Mortgage Loans comprised
in the Mortgage Portfolio and carry out its specific obligations
under this Agreement in accordance with the Administration
Procedures.
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(b) The Administrator will, in relation to any default by a Borrower
under or in connection with a Mortgage Loan or a Mortgage comprised
in the Mortgage Portfolio, comply with the Enforcement Procedures
or, to the extent that the Enforcement Procedures are not applicable
having regard to the nature of the default in question, take such
action as is not materially prejudicial to the interests of the
Mortgages Trustee (as trustee for the Beneficiaries) and the
Beneficiaries under the relevant MIG Policy, provided that:
(i) the Administrator shall only become obliged to comply with the
Enforcement Procedures (to the extent applicable) or to take
action as aforesaid after it has become aware of the default;
(ii) it is acknowledged by the Beneficiaries that mortgage lenders
generally exercise discretion in pursuing their respective
enforcement procedures and that the Administrator may exercise
such discretion as would a reasonable and prudent mortgage
lender in applying the Enforcement Procedures to any
particular defaulting Borrower or taking action as aforesaid,
provided that in exercising such discretion the interest of
Funding in the Mortgage Portfolio is not materially
prejudiced; and
(iii) in any case where any of the Insurance Policies requires exact
compliance with certain enforcement procedures, the
Administrator shall procure the prior written consent of the
relevant insurance company for any deviation by it from such
enforcement procedures.
5.3 RECORDS: The Administrator shall keep and maintain records in relation to
the Mortgage Portfolio, on a Mortgage Loan by Mortgage Loan basis, for the
purposes of identifying amounts paid by each Borrower, any amount due from
a Borrower and the balance from time to time outstanding on a Borrower's
account and such other records as would be kept by a reasonable and
prudent mortgage lender. Subject always to the restrictions and conditions
set forth in Clause 16, the Administrator will provide such information to
the Mortgages Trustee and/or Funding and/or the Security Trustee at any
time upon reasonable notice, subject to the Administrator being reasonably
capable of providing such information without significant additional cost
and subject to the provisions of the Data Protection Xxx 0000 and other
applicable legislation from time to time, and provided that no duty of
confidence and no industry code of practice will or may be breached
thereby.
5.4 TRUST:
(a) If the Administrator, in carrying out its functions as Administrator
under this Agreement, receives (including in its capacity as agent
for the Mortgages Trustee as trustee for the Beneficiaries) any
money whatsoever arising from the Mortgage Loans and their Related
Security, which money belongs to the Mortgages Trustee (as trustee
for the Beneficiaries) and is to be paid to the relevant Collection
Account pursuant to this Agreement or any of the other Transaction
Documents or otherwise, it will hold such monies on trust for the
Mortgages Trustee and shall keep such money separate from all other
monies held by the Administrator and shall, as soon as reasonably
practicable and in
11
any event within three (3) London Business Days of receipt of the
same, pay the monies into the relevant Collection Account.
(b) All other sums received by the Administrator in respect of the
Mortgage Loans and their Related Security shall be held by the
Administrator for itself.
6. NO LIABILITY
6.1 NO GUARANTEE OF MORTGAGE LOAN: The Administrator shall have no liability
for any obligation of a Borrower under any Mortgage Loan comprised in the
Mortgage Portfolio or any Related Security and nothing herein shall
constitute a guarantee, or similar obligation, by the Administrator of any
Mortgage Loan, Mortgage or any Borrower.
6.2 NO GUARANTEE TO MORTGAGES TRUSTEE OR BENEFICIARIES: Save as otherwise
provided in this Agreement, the Administrator shall have no liability for
the obligations of the Mortgages Trustee or the Beneficiaries under any of
the Transaction Documents or otherwise and nothing herein shall constitute
a guarantee, or similar obligation, by the Administrator of the Mortgages
Trustee or the Beneficiaries in respect of any of them.
7. NEW MORTGAGE LOANS
7.1 NEW MORTGAGE PORTFOLIO: The Mortgage Portfolio may be augmented from time
to time by the assignment to the Mortgages Trustee on any Distribution
Date of a New Mortgage Portfolio by the Seller.
7.2 ASSIGNMENT SUBJECT TO TERMS: The assignment of each New Mortgage Portfolio
to the Mortgages Trustee will in all cases be subject to the terms set out
in the Mortgage Sale Agreement including, without limitation, the
conditions set out in Clause 4 of the Mortgage Sale Agreement and the
representations and warranties set out in Clause 8 of the Mortgage Sale
Agreement.
8. PRODUCT SWITCHING AND FURTHER ADVANCES
8.1 ACCEPTANCE OF APPLICATION: The Administrator shall not accept an
application for a Further Advance or a Product Switch without first having
received confirmation in writing from the Seller that the Seller would, if
invited to do so by the Mortgages Trustee, purchase the relevant Mortgage
Loan and its Related Security from the Mortgages Trustee.
8.2 NOTIFICATION: Subject to complying with the terms of Clause 8.1 herein,
where the Administrator accepts a Product Switch or a Further Advance, the
Administrator shall then promptly notify the Seller and the Mortgages
Trustee in writing.
8.3 EXISTING BORROWERS RE-FIX RATE: Notwithstanding Clause 8.1 herein,
whenever Clause 8.6 of the Mortgage Sale Agreement applies to a Fixed Rate
Mortgage Loan, the Administrator may accept an application from a Borrower
to set the Existing Borrowers' Re-Fix Rate, subject to the terms of Clause
4.4 herein.
8.4 PROCEDURES: Subject to complying with the terms of Clauses 8.1 and 8.3
herein, the Administrator may accept requests from Borrowers for Product
Switches and Further
12
Advances provided that the Administrator acts in accordance with its then
procedure which would be acceptable to a reasonable and prudent mortgage
lender.
9. REDEMPTION OF MORTGAGES
9.1 RECEIPT OR DISCHARGE: Upon repayment in full of all sums secured by a
Mortgage and/or other Related Security comprised in the Mortgage
Portfolio, the Administrator shall, and is hereby authorised by the
Mortgages Trustee as trustee for the Beneficiaries to, execute a receipt
or discharge or relevant Form DS1 (of the United Kingdom Land Registry) of
the Mortgage and any such other or further instrument or deed of
satisfaction regarding such Mortgage and/or the Related Security as it
considers to be necessary or advisable and to release the relevant Title
Deeds to the person or persons entitled thereto.
9.2 TITLE DEEDS: The Administrator undertakes that prior to any actual release
by it of any relevant Title Deeds it will take reasonable and appropriate
steps to satisfy itself that the relevant Title Deeds are being released
to the person or persons entitled thereto.
9.3 PAYMENT OF SUMS DUE: The Administrator shall procure that if, upon
completion of the Enforcement Procedures, an amount in excess of all sums
due from the relevant Borrower is recovered or received, the balance,
after discharge of all sums due from the Borrower, is paid to the person
or persons next entitled thereto.
10. POWERS OF ATTORNEY
10.1 APPOINTMENT: The Mortgages Trustee hereby appoints the Administrator as
its attorney on its behalf, and in its own or the attorney's name, for the
following purposes:
(a) executing all documents necessary for the purpose of discharging a
Mortgage comprised in the Mortgage Portfolio which has been repaid
in full and any Related Security or for the sale of a Mortgaged
Property as Mortgagee;
(b) executing all documents necessary for the purpose of releasing a
Borrower in accordance with Clause 9 herein (Redemption of
Mortgages);
(c) executing all documents and doing all acts and things which in the
reasonable opinion of the Administrator are necessary or desirable
for the efficient provision of the Services hereunder; and
(d) exercising its rights, powers and discretion under the Mortgages
including the right to fix the rate of interest payable under the
Mortgage Loans or any related rights (but subject, in relation to
the right to set the interest rate under the Base Rate Pledge and
the Existing Borrowers' Re-Fix Rate, to the limitations, conditions
and qualifications set out in the Mortgage Sale Agreement and the
powers of attorney executed pursuant to it),
provided that, for the avoidance of doubt, these Powers of Attorney shall
not authorise the Administrator to sell any of the Mortgage Loans and/or
their Related Security comprised in the Mortgage Portfolio except as
specifically authorised in the Transaction Documents. For the avoidance of
doubt, neither the Mortgages Trustee nor Funding shall be liable or
responsible for the acts of the Administrator or any failure by the
Administrator to act under or in respect of these Powers of Attorney.
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10.2 APPOINTMENTS IRREVOCABLE: The appointments contained in Clause 10.1 herein
shall be irrevocable unless and until following a Termination Event
pursuant to Clause 19 herein (Termination) the Mortgages Trustee and/or
Funding and the Security Trustee serves notice pursuant to Clause 19
herein (Termination) to terminate the Administrator's appointment under
this Agreement upon which the appointments contained in Clause 10.1 herein
shall be automatically revoked.
11. COSTS AND EXPENSES
The Mortgages Trustee will on each Distribution Date reimburse, in
accordance with Clause 10.2(b) of the Mortgages Trust Deed, the
Administrator for all out-of-pocket costs, expenses and charges (inclusive
of any amounts in respect of Irrecoverable VAT due thereon) properly
incurred by the Administrator in the performance of the Services including
any such costs, expenses or charges not reimbursed to the Administrator on
any previous Distribution Date and the Administrator shall supply the
Mortgages Trustee with an appropriate VAT invoice issued by the person
making the supply.
12. INFORMATION
12.1 MAINTENANCE OF RECORDS:
(a) The Administrator shall keep the Mortgage Loan Files relating to the
Mortgage Portfolio in safe custody and shall take appropriate
technical and organisational measures against the unauthorised or
unlawful processing of personal data and against accidental loss or
destruction of, or damage to, personal data. The Administrator shall
maintain in an adequate form such records as are necessary to
enforce each Mortgage comprised in the Mortgage Portfolio and, where
relevant, any other Related Security. The Administrator shall keep
the Mortgage Loan Files in relation to the Mortgage Portfolio in
such a way that they can be distinguished from information held by
the Administrator for its own behalf as mortgagee or for other third
persons.
(b) A duplicate of any computer records held by the Administrator which
contains information relating to the Mortgage Loans and the Related
Security shall be lodged by the Administrator on a quarterly basis
in a location separate from that in which the original computer
records are stored and in an environment conducive to the safe
storage of electronic media and which allows the information to be
stored in an incorruptible form, such records to be held to the
order of the Mortgages Trustee and to be replaced by a revised
duplicate as and when the original records are revised. The
Administrator shall keep the Mortgages Trustee informed of the
location of the Mortgage Loan Files and duplicate computer records.
12.2 USE OF INFORMATION TECHNOLOGY SYSTEMS:
(a) The Administrator will use all reasonable endeavours to negotiate
with the relevant parties so that any intellectual property rights
not owned by it but used by it in connection with the performance of
its obligations under this Agreement and in particular all software
programmes used in connection with the Mortgage Loans and the
Related Security therefor and their administration
14
are licensed or sub-licensed to the Mortgages Trustee as trustee for
the Beneficiaries so as to permit the Mortgages Trustee as trustee
for the Beneficiaries to use such intellectual property rights only
in connection with the administration of the Mortgage Loans free of
charge for so long as any of the Mortgage Loans are outstanding. For
the avoidance of doubt, the Administrator shall not be in breach of
its obligations under this Agreement if such rights and/or software
programmes are not so licensed or sub-licensed to the Mortgages
Trustee as trustee for the Beneficiaries at any time after it has
ceased to be the Administrator:
(b) If this Agreement is terminated, then for a period of six months
following such termination (or such shorter period as may be
necessary to allow the administration of the Mortgage Loans to be
transferred to another person) the Administrator shall use
reasonable endeavours to assist the Mortgages Trustee and/or the
Beneficiaries and/or any substitute or successor Administrator to:
(i) establish and implement a computer system for administering
the Mortgage Loans; and
(ii) load the data held by the Administrator in relation to
Borrowers and the Mortgage Loans on to such computer system,
and, prior to (i) and (ii) having taken place, the Administrator
will provide all necessary access and assistance to the Mortgages
Trustee and/or the Beneficiaries and/or the substitute Administrator
in respect of its own intellectual property rights in relation to
the administration of the Mortgage Loans.
(c) Subject always to the restrictions and conditions set forth in
Clause 16, upon termination of the appointment of the Administrator
under this Agreement, the Administrator shall forthwith deliver to
the Mortgages Trustee and/or the Beneficiaries and/or the substitute
Administrator all computer and data records in its possession or
under its control relating to the affairs of or belonging to the
Mortgages Trustee and the Beneficiaries and/or relating to the
Mortgage Loans and the Related Security in a form agreeable to each
of the Administrator, the Mortgages Trustee and/or the Beneficiaries
and/or the substitute Administrator which accords with the standard
practice of the electronic data processing industry at the time the
event occurs.
(d) The Administrator covenants that it will take no action, nor omit to
take any action, the effect or likely effect of such action or
omission will be to terminate any existing licence agreement in
relation to any such intellectual property rights, provided that a
licence agreement may be terminated if it is replaced by a
substitute arrangement under which the intellectual property rights,
including rights to computer software, are such that the services
resulting therefrom are equivalent to the previous arrangement.
12.3 ACCESS TO BOOKS AND RECORDS: Subject to all applicable laws, and subject
always to the restrictions and conditions set forth in Clause 16, the
Administrator shall permit the Mortgages Trustee and Funding (and their
auditors) and the Security Trustee and any other person nominated by the
Beneficiaries (to whom the Administrator has no
15
reasonable objection) upon reasonable notice during normal office hours to
have access, or procure that such person or persons are granted access, to
all books of record and account (including, for the avoidance of doubt,
the Title Deeds and Mortgage Loan Files) relating to the administration of
the Mortgage Loans and the Related Security comprised in the Mortgage
Portfolio and related matters in accordance with this Agreement.
12.4 INFORMATION COVENANTS:
(a) The Administrator shall, within ten (10) Business Days following
each Payment Date, provide the Mortgages Trustee, the Beneficiaries,
the Rating Agencies, the Lead Manager, Bloomberg, L.P. (unless
otherwise prohibited by law) and any other party as the Mortgages
Trustee may direct with a report in, or substantially in, the form
set out in Schedule 2 hereto (or such other form reasonably
requested by the Mortgages Trustee and approved by the Beneficiaries
and the Rating Agencies) and shall assist the Cash Manager in the
production of quarterly reports substantially in the forms set out
in Schedule 3 of the Cash Management Agreement.
(b) The Administrator shall notify the Rating Agencies in writing of the
details of (i) any material amendment to the Transaction Documents,
(ii) any proposed material change in the valuation procedures or
policies applied or to be applied in relation to Mortgaged
Properties by it in connection with its mortgage business (details
of which change may be included in a report provided under
subparagraph (a) above) and (iii) any other information relating to
its mortgage business and financial condition as the Rating Agencies
may reasonably request in connection with the ratings of the First
Issuer Notes and any New Notes and other matters contemplated by the
Transaction, provided that such request does not adversely interfere
with the Administrator's day to day provision of the Services under
the other terms of this Agreement.
(c) The Administrator shall, at the request of Funding and the Security
Trustee (where the Administrator is the Seller) and at the request
of the Beneficiaries (where the Administrator is no longer the
Seller), furnish Funding, the Security Trustee and/or the
Beneficiaries (as appropriate) and the Rating Agencies with such
other information relating to its business and financial condition
as it may be reasonable for Funding, the Security Trustee and/or the
Beneficiaries (as appropriate) to request in connection with the
ratings of the First Issuer Notes and any New Notes and other
matters contemplated by the Transaction, provided that Funding, the
Security Trustee or the Beneficiaries (as is appropriate) shall not
make such a request more than once every three months unless, in the
belief of Funding, the Security Trustee or the Beneficiaries (as
appropriate), an Intercompany Loan Event of Default or a Termination
Event pursuant to Clause 19 herein shall have occurred and is
continuing or may reasonably be expected to occur.
13. REMUNERATION
13.1 ADMINISTRATION FEE: The Mortgages Trustee shall pay to the Administrator
for its Services hereunder an administration fee (the "ADMINISTRATION
FEE") (inclusive of VAT) which:
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(a) shall be calculated in relation to each Trust Calculation Period on
the basis of the number of days elapsed and a 365 day year (or, in
the case of a Trust Calculation Period ending in a leap year, a 366
day year) at the Administration Fee Rate, inclusive of VAT, on the
aggregate amount of the Funding Share of the Trust Property as at
close of business of such Trust Calculation Period; and
(b) shall be paid to the Administrator on each Distribution Date in the
manner contemplated by and in accordance with the provisions of
Clause 10 of the Mortgages Trust Deed.
13.2 SUBSTITUTE OR SUCCESSOR ADMINISTRATOR: If a substitute or successor
administrator shall be appointed under this Agreement with respect to any
of the Mortgage Loans, the Mortgages Trustee shall set the Administration
Fee Rate with such substitute or successor administrator at the time such
substitute or successor administrator enters into an administration
agreement.
14. INSURANCES
14.1 ADMINISTRATION: The Administrator will administer the arrangements for
insurance to which the Mortgages Trustee is a party or in which either the
Seller or the Mortgages Trustee has an interest and which relate to the
Mortgage Loans and the Mortgages comprised in the Mortgage Portfolio or
the business of the Mortgages Trustee.
14.2 ACTION OF ADMINISTRATOR: The Administrator shall not knowingly take or
omit to take any action which would:
(a) result in the avoidance or termination of any of the Insurance
Policies in relation to any Mortgage Loans and Mortgages to which
any Insurance Policy applies;
(b) reduce the amount payable on any claim made on behalf of the
Mortgages Trustee (as trustee for the Beneficiaries) under any
Insurance Policy; or
(c) invalidate any Insurance Policy.
14.3 SUBMISSION OF CLAIMS: The Administrator shall prepare and submit any claim
under the Insurance Policies in accordance with the requirements of the
relevant Insurance Policy and otherwise with the usual procedures
undertaken by a reasonable and prudent mortgage lender on behalf of the
Mortgages Trustee as trustee for the Beneficiaries and shall comply with
the other requirements of the insurer under the relevant Insurance Policy.
14.4 PROCEEDS: The Administrator shall use its reasonable endeavours to credit
to the relevant Collection Account all proceeds received from any claim
made under each Insurance Policy in relation to any Mortgage Loan by close
of business on the London Business Day which immediately follows the day
on which such amounts are received or credited by the Administrator (and
in any event within three (3) London Business Days of such receipt) and
which is applied either in whole or in part in repayment of a Mortgage
Loan.
17
14.5 MIG POLICIES:
(a) Without prejudice to Clause 3 herein, the Mortgages Trustee as
trustee for the Beneficiaries acknowledges that the Administrator
may settle or compromise claims on a Mortgage Loan by Mortgage Loan
basis in respect of any MIG Policy in a manner consistent with its
normal practice in respect of mortgage indemnity polices, provided
that the Administrator shall not, without the prior written consent
of the Mortgages Trustee, settle any claims or initiate any legal
proceedings or other legal process in respect of a group of class of
mortgages or in respect of the MIG Policies as a whole and provided
further that each such MIG Policy and all proceeds thereof remains
subject to the Funding Deed of Charge.
(b) If the Enforcement Procedures requires the Administrator to make a
claim under the relevant MIG Policy and the Administrator has failed
to make such a claim, then the Beneficiaries may direct the
Mortgages Trustee on their behalf to direct the Administrator to
make a claim or, in default thereof by the Administrator, the
Beneficiaries may direct the Mortgages Trustee to make a claim
itself under such policy and the Administrator shall, within ten
(10) London Business Days of receiving a written request from the
Mortgages Trustee (as trustee for the Beneficiaries), provide the
Mortgages Trustee with such information as the Mortgages Trustee may
require to enable it to make a claim under the relevant MIG Policy.
(c) Without prejudice to the rights of the Administrator under Clause
14.5(b) herein, the Administrator shall, in administering the
Mortgage Loans, ensure that the cover under any MIG Policy relating
to any Mortgage is not adversely affected.
14.6 BUILDINGS POLICIES:
(a) Upon receipt of notice that any Borrower whose Mortgage Loan is
secured by a mortgage of a leasehold Mortgaged Property has failed
to make a payment when due of any sums due under the relevant lease
in respect of the insurance of the property, the Administrator may
debit such Borrower's account with the relevant amount which shall
then be paid to the relevant landlord.
(b) If the Administrator becomes aware that a Borrower has failed to pay
premiums due under any Buildings Policy, the Administrator shall
take such action as would a reasonable and prudent mortgage lender
with a view to ensuring that the relevant Mortgaged Property
continues to be insured in accordance with the applicable Mortgage
Terms or the Alternative Insurance Requirements.
14.7 LIFE POLICIES:
(a) The Administrator shall use its reasonable endeavours to ensure that
upon maturity of a Life Policy or on the death of a Borrower, if
earlier, all sums which it is agreed between the Seller and the
relevant Borrower are due to be paid under the Life Policy are paid
by the relevant insurance company in
18
repayment of the Mortgage for which such Life Policy is collateral
security and credited to the relevant Collection Account.
(b) If so requested by a Borrower the Administrator may, on behalf of
the Beneficiaries, exercise its discretion as a reasonable and
prudent mortgage lender to agree to the release of a Life Policy
from the relevant legal or equitable charge granted by the related
Borrower in favour of the Seller.
15. TITLE DEEDS
15.1 CUSTODY: The Administrator shall keep the Title Deeds relating to the
Mortgage Portfolio in safe custody and shall not without the prior written
consent of the Mortgages Trustee and the Beneficiaries part with
possession, custody or control of them otherwise than to a sub-contractor
or delegate appointed pursuant to Clause 3.2 herein (Sub-Contracts) or to
a solicitor, licensed conveyancer or authorised practitioner, subject to
the usual undertaking to hold them to the order of the Seller (who in turn
will hold them to the order of the Mortgages Trustee (as trustee for the
Beneficiaries)) or to H.M. Land Registry or, upon redemption of the
relevant Mortgage Loan, to the order of the Borrower.
15.2 IDENTIFICATION: The Title Deeds relating to the Mortgage Portfolio shall
be kept in a manner such that a computer record is maintained of their
location and they are identifiable and retrievable by reference to an
account number and pool identifier and identifiable and distinguishable
from the title deeds relating to other properties and mortgages in respect
of which the Administrator is mortgagee or administrator.
15.3 ACCESS: The Administrator shall provide access, or procure that access is
provided to, the Title Deeds relating to the Mortgage Portfolio to the
Mortgages Trustee, the Beneficiaries and their respective agents at all
reasonable times and upon reasonable notice. The Administrator
acknowledges that the Title Deeds and Mortgage Loan Files relating to the
Mortgage Portfolio in its possession, custody or control will be held to
the order of the Mortgages Trustee (as trustee for the Beneficiaries) and
that it has, in its capacity as Administrator, no beneficial interest
therein and the Administrator (in its capacity as such but not in its
capacity as a Beneficiary) irrevocably waives any rights or any Security
Interest which it might have therein or to which it might at any time be
entitled.
15.4 DELIVERY UPON TERMINATION: The Administrator shall, forthwith on the
termination of the appointment of the Administrator pursuant to Clause 19
herein (Termination), deliver the Title Deeds and Mortgage Loan Files to
or to the order of the Mortgages Trustee or to such person as the
Mortgages Trustee elects as a substitute administrator in accordance with
the terms of this Agreement upon written request by the Mortgages Trustee
made at any time on or after notice of, or on or after, termination of the
appointment of the Administrator pursuant to Clause 19 herein
(Termination).
16. DATA PROTECTION
The Administrator represents that as at the date hereof the Administrator
has and hereafter it will maintain on behalf of itself and on behalf of
the Mortgages Trustee (as trustee for the Beneficiaries) all appropriate
registrations, licences and authorities (if any) required under the Data
Protection Xxx 0000 to enable each of them to
19
perform their respective obligations under this Agreement. In addition to
the foregoing and notwithstanding any of the other provisions of this
Agreement, each of the Administrator and the Mortgages Trustee hereby
agree and covenant as follows:
(a) that only non-"PERSONAL DATA" (as described in the Data Protection
Act 1998) may be transferred by the Administrator to the Mortgages
Trustee or any other entity located in Jersey (unless Jersey is
declared an "approved state" by the European Commission, in which
case the Administrator may transfer such personal data to the
Mortgages Trustee in Jersey);
(b) that, to the extent that circumstances enable the Mortgages Trustee
to exercise its right to demand that the Administrator transfer
inter alia personal data to the Mortgages Trustee, the Administrator
shall only transfer such personal data to an agent of the Mortgages
Trustee that is located in the United Kingdom and maintains all
appropriate registrations, licences and authorities (if any)
required under the Data Protection Xxx 0000 (unless Jersey is
declared an "APPROVED STATE" by the European Commission, in which
case the Administrator may transfer such personal data to the
Mortgages Trustee in Jersey);
(c) that, to the extent that circumstances enable the Mortgages Trustee
to exercise its right to demand that the Administrator transfer
inter alia personal data to the Mortgages Trustee, the Administrator
notify each Borrower that the Mortgages Trustee is a "DATA
CONTROLLER" (as defined in the Data Protection Act 1998) and provide
each such Borrower with the address of the Mortgages Trustee;
(d) that the Administrator and the Mortgages Trustee will only use any
data in relation to the Mortgage Loans and the related Borrowers for
the purposes of administering and/or managing the Mortgage
Portfolio, and will not sell such data to any third party or allow
any third party to use such data other than in compliance with the
conditions stated in this Clause 16 and for the sole purpose of
administering and/or managing the Mortgage Portfolio;
(e) that the Mortgages Trustee will comply with the provisions of the
Data Protection (Jersey) Law 1987 (as amended) and (so long as the
provisions of the Data Protection Xxx 0000 do not conflict with the
provisions of the Data Protection (Jersey) Law 1987) with the
provisions of the Data Protection Act 1998 (as amended);
(f) that, upon the request of a Borrower, the Administrator will inform
such Borrower that both the Administrator and the Mortgages Trustee
are "data controllers" as described in the Data Protection Xxx 0000;
and
(g) that both the Administrator and the Mortgages Trustee shall maintain
a written record of their reasons for applying the Data Protection
Order 2000 (as set forth under the Conditions under paragraph 3 of
Part II of Schedule I of such Order).
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17. COVENANTS AND REPRESENTATIONS AND WARRANTIES OF ADMINISTRATOR
17.1 COVENANTS: The Administrator hereby covenants with and undertakes to each
of the Mortgages Trustee, the Beneficiaries and the Security Trustee that,
without prejudice to any of its specific obligations hereunder, it will:
(a) administer the Mortgage Loans and their Related Security as if the
same had not been assigned to the Mortgages Trustee but had remained
on the books of the Seller;
(b) provide the Services in such manner and with the same level of
skill, care and diligence as would a reasonable and prudent mortgage
lender;
(c) comply with any reasonable directions, orders and instructions which
the Mortgages Trustee or the Beneficiaries may from time to time
give to it in accordance with the provisions of this Agreement and,
in the event of any conflict, those of the Mortgages Trustee shall
prevail;
(d) keep in force all licences, approvals, authorisations and consents
which may be necessary in connection with the performance of the
Services and prepare and submit all necessary applications and
requests for any further approval, authorisation, consent or licence
required in connection with the performance of the Services and in
particular any necessary registrations under the Data Protection Xxx
0000;
(e) not knowingly fail to comply with any legal requirements in the
performance of the Services;
(f) make all payments required to be made by it pursuant to this
Agreement on the due date for payment thereof in pounds sterling (or
as otherwise required under the Transaction Documents) in
immediately available funds for value on such day without set-off
(including, without limitation, any fees owed to it) or
counterclaim, but subject to any deductions required by law;
(g) not without the prior written consent of the Mortgages Trustee amend
or terminate any of the Transaction Documents save in accordance
with their terms;
(h) forthwith upon becoming aware of any event which may reasonably give
rise to an obligation of the Seller to repurchase any Mortgage Loan
pursuant to Clause 8 of the Mortgage Sale Agreement, notify the
Mortgages Trustee and the Beneficiaries in writing of such event;
17.2 COVENANTS TO SURVIVE: The covenants of the Administrator in Clause 17.1
herein shall remain in force until this Agreement is terminated but
without prejudice to any right or remedy of the Mortgages Trustee and/or
the Seller and/or Funding arising from breach of any such covenant prior
to the date of termination of this Agreement.
17.3 REPRESENTATIONS AND WARRANTIES: The Administrator hereby makes the
representations and warranties to each of the Mortgages Trustee, Funding
and the Security Trustee that are specified on Schedule 3 hereto.
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18. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Administrator from rendering
or performing services similar to those provided for in this Agreement to
or for itself or other persons or from carrying on business similar to or
in competition with the business of the Mortgages Trustee and the
Beneficiaries.
19. TERMINATION
19.1 TERMINATION EVENT: If any of the following events (each a "Termination
Event") shall occur:
(a) default is made by the Administrator in the payment on the due date
of any payment due and payable by it under this Agreement and such
default continues unremedied for a period of five London Business
Days after the Administrator becoming aware of such default;
(b) default is made by the Administrator in the performance or
observance of any of its other covenants and material obligations
under this Agreement or any of the other Transaction Documents,
which, the Security Trustee having been informed thereof as
specified below in this sub-clause, is materially prejudicial to the
interests of the holders of the First Issuer Notes and any New Notes
from time to time and such default continues unremedied for a period
of twenty (20) days after the Administrator becoming aware of such
default, provided however that where the relevant default occurs as
a result of a default by any person to whom the Administrator has
sub-contracted or delegated part of its obligations hereunder, such
default shall not constitute a Termination Event if within such
twenty (20) day period the Administrator replaces the relevant
sub-contractor or delegate with an entity capable of remedying such
default or alternatively indemnifies the Mortgages Trustee and the
Beneficiaries against the consequences of such default;
(c) the Administrator at any time fails to obtain the necessary license
or regulatory approval required by any UK mortgage regulatory regime
which would be required in order to enable it to continue
administering the Mortgage Loans; or
(d) the Administrator becomes subject to an Insolvency Event,
then the Mortgages Trustee and/or Funding and the Security Trustee may at
once or at any time thereafter while such default continues, by notice in
writing to the Administrator, terminate its appointment as Administrator
under this Agreement with effect from a date (not earlier than the date of
the notice) specified in such notice. Upon termination of the
Administrator, the Security Trustee shall use its reasonable endeavours to
appoint a substitute Administrator that satisfies the conditions set forth
in Clause 19.2(c), (d) and (e), provided that in the event the Security
Trustee has not, having used reasonable endeavours, appointed a substitute
Administrator, the Security Trustee shall have no liability to any person
and, notwithstanding any other provision of the Transaction Documents,
shall not itself be required to perform any duties of the Administrator.
19.2 RESIGNATION: The Administrator may resign under this Agreement at any time
following the expiry of not less than 12 months' notice of resignation
given by the Administrator to the Mortgages Trustee and the Beneficiaries
provided that:
22
(a) the Mortgages Trustee and the Beneficiaries consent in writing to
such termination;
(b) a substitute administrator is appointed by the Mortgages Trustee,
Funding and the Security Trustee (and in the event of failure to
agree, by the Security Trustee), such appointment to be effective
not later than the date of such termination (and the Administrator
shall notify the Rating Agencies in writing of the identity of such
substitute administrator);
(c) if possible, such substitute administrator has experience of
administering mortgages of residential property in England and Wales
and is approved by the Mortgages Trustee and the Beneficiaries;
(d) such substitute administrator enters into an agreement on
substantially the same terms as the relevant provisions of this
Agreement and the Administrator shall not be released from its
obligations under the relevant provisions of this Agreement until
such substitute administrator has entered into such new agreement;
and
(e) the then current ratings (if any) of the First Issuer Notes or any
New Notes are not adversely affected as a result thereof, unless
otherwise agreed by an Extraordinary Resolution (as defined in the
Note Trust Deed) of the holders of the relevant class of Notes.
19.3 TERMINATION OF AUTHORITY: On and after resignation by, or termination of
the appointment of, the Administrator under this Agreement pursuant to
this Clause 19, all authority and power of the Administrator under this
Agreement shall be terminated and be of no further effect and the
Administrator shall not thereafter hold itself out in any way as the agent
of the Mortgages Trustee and/or the Beneficiaries pursuant to this
Agreement.
19.4 DELIVERY OF FILES: Upon resignation by, or termination of the appointment
of, the Administrator under this Agreement pursuant to this Clause 19, the
Administrator shall:
(a) forthwith deliver to (and in the meantime hold on trust for, and to
the order of) the Mortgages Trustee or as it shall direct the
Mortgage Loan Files, the Title Deeds, all books of account, papers,
records, registers, correspondence and documents in its possession
or under its control relating to the affairs of, or belonging to,
the Mortgages Trustee (as trustee for the Beneficiaries) and the
Mortgages in the Mortgage Portfolio and any other Related Security,
(if practicable, on the date of receipt) any monies then held by the
Administrator on behalf of the Mortgages Trustee and any other
assets of the Mortgages Trustee as trustee for the Beneficiaries;
(b) take such further action as the Mortgages Trustee, Funding and the
Security Trustee may reasonably direct at the expense of the
Beneficiaries (including in relation to the appointment of a
substitute administrator) provided that neither the Mortgages
Trustee nor the Security Trustee shall be required to take or direct
to be taken such further action unless it has been indemnified to
its satisfaction;
23
(c) provide all relevant information contained on computer records in
the form of magnetic tape, together with details of the layout of
the files encoded on such magnetic tapes; and
(d) co-operate and consult with and assist the Mortgages Trustee,
Funding, the Security Trustee and their nominees (which shall, for
the avoidance of doubt, include any new administrator appointed by
any of them) for the purposes of explaining the file layouts and the
format of the magnetic tapes generally containing such computer
records on the computer system of the Mortgages Trustee or such
nominee.
19.5 NOTIFICATION OF TERMINATION EVENT: The Administrator shall notify the
Mortgages Trustee, the Security Trustee and the Beneficiaries as soon as
reasonably practicable but in any event within five (5) days of becoming
aware of any Termination Event or any event which with the giving of
notice or lapse of time or certification would constitute the same. Such
notification shall specify which event in Clause 19 occurred and was the
cause of such Termination Event (or any event which with the giving of
notice or lapse of time or certification would constitute a Termination
Event), a description of the details of such Termination Event, and a
reference to the provision in this Agreement or the other Transaction
Documents which the Administrator has breached.
19.6 NO PREJUDICE: Termination of this Agreement or the appointment of the
Administrator under this Agreement shall be without prejudice to the
liabilities of the Mortgages Trustee as trustee for the Beneficiaries to
the Administrator or vice versa incurred before the date of such
termination. The Administrator shall have no right of set-off or any lien
in respect of such amounts against amounts held by it on behalf of the
Mortgages Trustee.
19.7 AUTOMATIC TERMINATION: This Agreement shall terminate at such time as the
Mortgages Trustee has no further interest in any of the Mortgage Loans or
the Mortgages which have been comprised in the Mortgage Portfolio.
19.8 FURTHER COMPENSATION: Upon resignation by, or termination of the
appointment of, the Administrator under the provisions of this Clause 19,
the Administrator shall be entitled to receive all fees and other monies
accrued up to the date of resignation or termination, as the case may be,
but shall not be entitled to any other or further compensation. Such
monies so receivable by the Administrator shall be paid by the Mortgages
Trustee on the dates on which they would otherwise have fallen due
hereunder. For the avoidance of doubt, such resignation or termination
shall not affect the Administrator's rights to receive payment of all
amounts (if any) due to it from the Mortgages Trustee other than under
this Agreement.
19.9 CO-OPERATION: Prior to termination of this Agreement, the Administrator,
the Seller, the Mortgages Trustee and Funding shall co-operate to obtain
the agreement of the Borrowers to a new bank mandate permitting the
Mortgages Trustee to operate the Direct Debiting Scheme.
19.10 SURVIVAL OF TERMS: Any provision of this Agreement which is stated to
continue after termination of the Agreement shall remain in full force and
effect notwithstanding termination.
24
19.11 NO SUPERVISION: The Security Trustee shall not be obliged to monitor or
supervise the performance by any substitute Administrator of its duties
hereunder or in relation to the other Transaction Documents, nor shall the
Security Trustee be responsible or liable for any act or omission of such
substitute Administrator or for any loss caused thereby.
20. FURTHER ASSURANCES
20.1 CO-OPERATION: The parties hereto 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 Agreement.
20.2 POWERS OF ATTORNEY: Without prejudice to the generality of Clause 20.1
herein, the Mortgages Trustee as trustee for the Beneficiaries shall upon
request by the Administrator forthwith give to the Administrator such
further powers of attorney or other written authorisations, mandates or
instruments as are necessary to enable the Administrator to perform the
Services.
20.3 NOTICE TO RATING AGENCIES: In the event that there is any change in the
identity of the Mortgages Trustee or an additional Mortgages Trustee is
appointed, the remaining Mortgages Trustee and/or the retiring Mortgages
Trustee, as the case may be, shall execute such documents with any other
parties to this Agreement and take such actions as such new Mortgages
Trustee may reasonably require for the purposes of vesting in such new
Mortgages Trustee the rights of the Mortgages Trustee under this Agreement
and releasing the retiring Mortgages Trustee from further obligations
thereunder and while any Note remains outstanding shall give notice
thereof to the Rating Agencies.
20.4 NO OBLIGATIONS: Nothing herein contained shall impose any obligation or
liability on the Mortgages Trustee to assume or perform any of the
obligations of the Administrator hereunder or render it liable for any
breach hereof.
21. MISCELLANEOUS
21.1 INSUFFICIENT FUNDS: Subject to Clause 21.2 herein, in the event that the
funds available to the Mortgages Trustee on any Payment Date are not
sufficient to satisfy in full the aggregate amount payable to the
Administrator by the Mortgages Trustee on such Payment Date then the
amount payable to the Administrator on such Payment Date shall be reduced
by the amount of the shortfall and such shortfall shall (subject always to
the provisions of this Clause 21) be payable on the immediately succeeding
Payment Date.
21.2 REDUCTION OF FEES: In the event that:
(a) after redemption in full of the Intercompany Loans; or
(b) after service of an Intercompany Loan Enforcement Notice and payment
of all other prior claims,
the remaining sums available to the Mortgages Trustee or remaining
proceeds of enforcement are insufficient to satisfy in full the
outstanding fees or other claims of the Administrator, such fees shall be
reduced by the amount of the deficiency.
25
21.3 SET-OFF: Each of the Seller and the Administrator agrees that it will not:
(a) set off or purport to set off any amount which the Mortgages
Trustee, Funding or each Issuer is or will become obliged to pay to
it under any of the Transaction Documents against any amount from
time to time standing to the credit of or to be credited to any
Collection Account, the Mortgages Trustee Transaction Account, the
Mortgages Trustee GIC Account, the Funding Transaction Account, the
Funding GIC Account, any Funding (Issuer) GIC Account, any Issuer
Transaction Account in any other account prior to transfer to any
Collection Account, the Mortgages Trustee Transaction Account, the
Mortgages Trustee GIC Account, the Funding Transaction Account, the
Funding GIC Account, any Funding (Issuer) GIC Account or any Issuer
Transaction Account, as appropriate; or
(b) make or exercise any claims or demands, any rights of counterclaim
or any other equities against or withhold payment of any and all
sums of money which may at any time and from time to time be
standing to the credit of any Collection Account, the Mortgages
Trustee Transaction Account, the Mortgages Trustee GIC Account, the
Funding Transaction Account, the Funding GIC Account, any Funding
(Issuer) GIC Account or any Issuer Transaction Account.
21.4 NO PETITION: The Administrator agrees that for so long as any First Issuer
Notes and New Notes are outstanding it will not petition nor commence
proceedings for the administration or winding up of the Mortgages Trustee
or Funding or any Issuer nor participate in any ex parte proceedings with
regard thereto.
21.5 LIMITED RECOURSE: In relation to all sums due and payable by the Mortgages
Trustee to the Administrator, the Administrator agrees that it shall have
recourse only to sums paid to or received by (or on behalf of) the
Mortgages Trustee pursuant to the provisions of the Mortgage Sale
Agreement, the other Transaction Documents and in relation to the
Mortgages.
21.6 NO PREJUDICE: For the avoidance of doubt, neither Beneficiary shall be
liable to pay any amounts due under Clauses 11 or 13 herein without
prejudice to the obligations of the Mortgages Trustee in respect of such
amounts.
21.7 TERMINATION: Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of, Funding under or in connection with this
Agreement (other than its obligations under Clause 22 herein
(Confidentiality)) shall automatically terminate upon the discharge in
full of all amounts owing by it under any Intercompany Loan Agreement,
provided that this shall be without prejudice to any claims in respect of
such obligations and rights arising on or prior to such date.
22. CONFIDENTIALITY
From the date of this Agreement and notwithstanding its termination, each
of the Mortgages Trustee and the Beneficiaries shall use its best
endeavours not to disclose to any person whatsoever any information
relating to the business, finances or other matters of a confidential
nature of any other party hereto of which it may by virtue of being party
to the Transaction Documents have become possessed and shall use all
26
reasonable endeavours to prevent any such disclosure as aforesaid,
provided however that the provisions of this Clause 22 shall not apply:
(a) to any information already known to the Mortgages Trustee or the
Beneficiaries otherwise than as a result of entering into any of the
Transaction Documents;
(b) to any information subsequently received by the Mortgages Trustee or
the Beneficiaries which it would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge otherwise
than as a result of the conduct of the Mortgages Trustee or the
Beneficiaries;
(d) to any extent that the Mortgages Trustee or the Beneficiaries is
required to disclose the same pursuant to any Transaction Document,
pursuant to any law or order of any court or pursuant to any
direction, request or requirement (whether or not having the force
of law) of any central bank or any governmental or other authority
(including, without limitation, any official bank examiners or
regulators);
(e) to the extent that the Mortgages Trustee or the Beneficiaries needs
to disclose the same for determining the existence of, or declaring,
an Intercompany Loan Event of Default or a Termination Event, the
protection or enforcement of any of its rights under any of the
Transaction Documents or in connection herewith or therewith or for
the purpose of discharging, in such manner as it thinks fit, its
duties under or in connection with such agreements in each case to
such persons as require to be informed of such information for such
purposes; or
(f) in relation to any information disclosed to the professional
advisers of the Mortgages Trustee or the Beneficiaries or (in
connection with the review of current ratings of the First Issuer
Notes or any New Notes or with a prospective rating of any debt to
be issued by an Issuer) to any credit rating agency or any
prospective new Administrator or Mortgages Trustee.
23. NO PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any partnership between any
of the parties.
24. ASSIGNMENT
24.1 CONSENT: The Mortgages Trustee may not assign or transfer any of its
rights and obligations under this Agreement without the prior written
consent of each of the Beneficiaries.
24.2 AGREEMENT: The Administrator may not assign or transfer any of its rights
or obligations under this Agreement (a) without the prior written consent
of the Mortgages Trustee (as trustee for the Beneficiaries) and each of
the Beneficiaries and (b) other than to a person who agrees to be bound by
the provisions contained in Clause 5 of the Funding Deed of Charge as if
such person had been named as an original party thereto in place of
Northern Rock but without prejudice to their obligations under such
Clause.
27
24.3 ASSIGNMENT OF RIGHTS TO SECURITY TRUSTEE: The Administrator acknowledges
that Funding has assigned its rights under this Agreement to the Security
Trustee pursuant to the Funding Deed of Charge and acknowledges that
pursuant to the terms of the Funding Deed of Charge, Funding has, inter
alia, authorised the Security Trustee, following the Funding Security
becoming enforceable, to exercise, or refrain from exercising, all of
Funding's rights, powers, authorities, discretions and remedies under or
in respect of the Funding Transaction Documents, including this Agreement,
in such manner as in the Security Trustee's absolute discretion it shall
think fit.
25. SECURITY TRUSTEE; AUTHORISED THIRD PARTY
25.1 VESTING OF RIGHTS: If there is any change in the identity of the security
trustee in accordance with the Funding Deed of Charge, the Administrator,
the Seller, Funding and the Mortgages Trustee shall execute such documents
and take such action as the successor security trustee and the outgoing
security trustee may reasonably require for the purpose of vesting in the
successor security trustee the rights and obligations of the outgoing
security trustee under this Agreement and releasing the outgoing security
trustee from its future obligations under this Agreement.
25.2 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 Administrator, the Seller, Funding or
the Mortgages Trustee under this Agreement. 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 and Schedule 4 hereto.
25.3 DELEGATION: The Security Trustee may delegate the performance of all or
any of its powers and obligations under all or any of the Operating
Agreements pursuant to the terms of Schedule 4 of this Agreement and
subject always to the provisions of the Funding Deed of Charge.
26. NEW INTERCOMPANY LOAN AGREEMENTS
If Funding enters into a New Intercompany Loan Agreement, then the
Administrator, the Seller, Funding, the Security Trustee and the Mortgages
Trustee shall execute such documents and take such action as may be
necessary or required by the Rating Agencies for the purpose of including
the New Issuer, any Basis Rate Swap Provider, any Currency Swap Provider,
any New Start-up Loan Provider and any other person who has executed an
Accession Undertaking or any New Intercompany Loan Agreement in the
Transaction Documents.
27. NON PETITION COVENANT; LIMITED RECOURSE
27.1 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.
28
27.2 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
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.
27.3 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.
29
28. AMENDMENTS AND WAIVER
28.1 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.
28.2 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.
28.3 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.
28.4 VARIATION OR WAIVER: No variation or waiver of this Agreement shall be
made if the same would adversely affect the then current ratings of` any
of the Notes.
29. 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
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 Administrator and the Seller, to Northern Rock
PLC, Northern 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, c/o 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, 4th
Floor, 00 Xxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX (facsimile
number 0000-000-0000 for the attention of the Company Secretary;
(d) in the case of the Security Trustee, to The Bank of New York (London
Branch), Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX (facsimile
number 020-7964-6399) for the attention of Corporate Trust (Global
Structured Finance);
30
(e) in the case of Fitch, to Fitch Ratings Ltd., at Xxxxx Xxxxx, 0 Xxxxx
Xxxxxx, Xxxxxx XX0X 0XX (facsimile number 0207 7417 6262) for the
attention of European Structured Finance Surveillance;
(f) in the case of Moody's, to Xxxxx'x Investors Services, Inc., at 1st
Floor, 0 Xxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxx XX0X 0XX (facsimile
number 0207 772 5400) for the attention of Xxxxx Xxxxxxxx;
(g) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., at Xxxxxx Xxxxx, 00
Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number 0207-826-3598)
for the attention of Xxxxx Xxxxxxxx;
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
or by any Rating Agency to the others by written notice in accordance with
the provisions of this Clause 29. All notices served under this Agreement
shall be simultaneously copied to the Security Trustee by the person
serving the same.
30. 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.
31. EXECUTION IN COUNTERPARTS; SEVERABILITY
31.1 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.
31.2 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.
32. GOVERNING LAW AND SUBMISSION TO JURISDICTION
32.1 GOVERNING LAW: This Agreement is governed by, and shall be construed
in accordance with, English law.
32.2 SUBMISSION TO JURISDICTION: Each of the parties hereto irrevocably agrees
that the courts of 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.
31
33. PROCESS AGENT
The Mortgages Trustee irrevocably and unconditionally appoints Mourant &
Co. Capital (SPV) Limited at Xxxxxx Xxxxx, 00 Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxxx, 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.
34. 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.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as a
deed the day and year first before written.
32
SCHEDULE 1
THE SERVICES
In addition to the Services set out in the body of the Administration Agreement,
the Administrator shall:
(a) keep records (written or computerised) and books of account for the
Mortgages Trustee in relation to the Mortgage Loans comprised in the
Mortgage Portfolio;
(b) keep records for all taxation purposes and VAT;
(c) notify relevant Borrowers of any change in their Monthly Payments;
(d) assist the auditors of the Mortgages Trustee and provide information
to them upon reasonable request;
(e) provide a redemption statement to a Borrower or any person acting on the
Borrower's behalf, in each case upon written request or otherwise at the
discretion of the Administrator;
(f) notify relevant Borrowers of any other matter or thing which the
applicable Mortgage Conditions or Offer Conditions require them to be
notified of in the manner and at the time required by the relevant
Mortgage Terms;
(g) subject to the provisions of this Agreement (including without limitation
Clause 5.2 herein (Administration and Enforcement of Mortgages) take all
reasonable steps to recover all sums due to the Mortgages Trustee
including without limitation by the institution of proceedings and/or the
enforcement of any Mortgage Loan comprised in the Mortgage Portfolio or
any New Mortgage Portfolio or any Related Security;
(h) take all other action and do all other things which it would be reasonable
to expect a reasonable and prudent mortgage lender to do in administering
its mortgages;
(i) keep a Mortgage Account for each Mortgage Loan which shall record all
proceeds received in respect of that Mortgage Loan and all amounts debited
to such Mortgage Account;
(j) at its discretion, prepare and send on request an annual statement
to Borrowers in relation to each calendar year in the agreed form;
and
(k) assist the Cash Manager in the preparation of a quarterly report
substantially in the form set out in the Cash Management Agreement.
33
SCHEDULE 2
FORM OF INVESTORS' QUARTERLY REPORT
GRANITE FINANCE TRUSTEES LIMITED
MONTHLY REPORT
Date of Report [ ]
MORTGAGES
Number of Mortgages in Pool [ ]
Current Balance (pound)[ ]
Opening Trust Assets (pound)[ ]
Funding Share (pound)[ ]
Funding Share Percentage [ ]%
Seller Share (pound)[ ]
Seller Share Percentage [ ]%
Minimum Seller Share (Amount) (pound)[ ]
Minimum Seller Share (% of Total) [ ]%
ARREARS ANALYSIS OF NON REPOSSESSED MORTGAGES
Number Principal Arrears
Less than [ ] month [ ] [ ] [ ]
[ ] - [ ] months [ ] [ ] [ ]
[ ] - [ ] months [ ] [ ] [ ]
[ ] - [ ] months [ ] [ ] [ ]
[ ] - [ ] months [ ] [ ] [ ]
[ ] months + [ ] [ ] [ ]
Total [ ] [ ] [ ]
34
Properties in Possession Number Principal Arrears
Total [ ] [ ] [ ]
Number Brought Forward [ ]
Repossed [ ]
Sold [ ]
Number Carried Forward [ ]
Average Time from [ ]
Possession to Sale
Average Arrears at Sale [ ]
Repossed [ ]
MIG Claims Submitted [ ]
MIG Claims Outstanding [ ]
Average Time from Claim [ ]
to Payment
Note: The arrears analysis and repossession information is as at close of
business for the report month
Substitution Number Principal
Substituted this period (this [ ] [ ]
month)
Substituted to dated (since [ ] [ ]
[ ])
CPR Analysis Monthly Annualised
Current [ ] Month CPR Rate [ ]% [ ]%
Previous [ ] Month CPR Rate [ ]% [ ]%
Weighted Average Seasoning (by value) [ ]
Average Loan Size [ ]
Weighted Average LTV (by value) [ ]%
35
Product Breakdown
Fixed Rate [ ]%
Flexible - Together [ ]%
LTV LEVELS BREAKDOWN Number Value
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ] - [ ]% [ ] [ ]
[ ]% + [ ] [ ]
Totals [ ] [ ]
NR Current Existing Borrowers' [ ]
SVR
Effective Date of Change [ ]
36
NOTES Outstanding Rating Reference Rate
Moodys/S&P/Fitch
Series 1
A1 $ XXX,XXX,XXX Aaa/AAA/AAA X.XXX% X.XX%
A2 $ XXX,XXX,XXX Aaa/AAA/AAA X.XXX% X.XX%
B $ XX,XXX,XXX Aa3/AA/AA X.XXX% X.XX%
C $ XX,XXX,XXX Baa2/BBB/BBB X.XXX% X.XX%
Series 2
A (pound) XXX,XXX,XXX Aaa/AAA/AAA X.XXX% X.XX%
B (pound) XX,XXX,XXX Aa3/AA/AA X.XXX% X.XX%
C (pound) XX,XXX,XXX Baa2/BBB/BBB X.XXX% X.XX%
Issuer Reserve Fund Requirement (pound)[ ]
Balance brought forward (pound)[ ]
Drawings this period
Reserve Fund Top-up this period* (pound)[ ]
Excess Spread (pound)[ ]
Current Balance (pound)[ ]
*Top-ups only occur at the end of each quarter.
Funding Reserve Balance (pound)[ ]
Funding Reserve % [ ]%
37
SCHEDULE 3
ADMINISTRATOR REPRESENTATIONS AND WARRANTIES
The Administrator 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;
(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.
7. SOLVENCY: No Insolvency Event has occurred in respect of the
Administrator, and the Administrator is not insolvent.
38
8. FINANCIAL STATEMENTS: The most recent financial statements of the
Administrator:
(a) were prepared in accordance with accounting principles generally
accepted in England and Wales consistently applied;
(b) disclose all liabilities (contingent or otherwise) and all
unrealised and or anticipated losses of the Administrator; and
(c) save as disclosed therein, give a true and fair view of the
financial condition and operations of the Administrator during the
relevant financial year.
9. NO ADVERSE CHANGE: Since the date as of which the most recent financial
statements of the Administrator were stated to be prepared, there has
been:
(a) no significant change in the financial position of the
Administrator; and
(b) no material adverse change in the financial position or prospects of
the Administrator.
10. RANKING OF CLAIMS
Under the laws of England and Wales in force as at the date of making this
representation, claims against the Administrator under the Transaction
Documents will rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, save those whose claims are
preferred solely by any bankruptcy, liquidation or other similar laws of
general application.
11. INFORMATION IN PROSPECTUS AND OFFERING CIRCULAR:
(a) All information in the Prospectus and the Offering Circular with
regard to the Administrator, its business and its experience
administering mortgage loans (including its arrears and repossession
experience) are true and accurate in all material respects and not
misleading in any material respect.
(b) Any opinions, predictions and intentions expressed in the Prospectus
and/or the Offering Circular on the part of the Administrator are
honestly held and not misleading in any material respect.
(c) Each of the Prospectus and the Offering Circular does not omit to
state any material fact necessary to make such information,
opinions, predictions or intentions not misleading in any material
respect.
(d) The Administrator has made all proper inquiries to ascertain and to
verify the foregoing.
39
SCHEDULE 4
AUTHORISED THIRD PARTY
1. AGREEMENT TO ALLOW DELEGATION
1.1. The Seller and the Administrator agree (subject to the other provisions of
this Schedule, including paragraph 2 (Appointment and Payment) and subject
to the Funding Deed of Charge) that the Security Trustee may appoint or
facilitate the appointment of an Authorised Third Party to implement,
administer and carry out the duties and powers of the Security Trustee:
(a) under the Seller's Power of Attorney;
(b) in connection with and following a Completion Event; and
(c) in connection with and following a Termination Event,
(together the "BACK-UP FUNCTIONS")
1.2. Each of the Seller and the Administrator shall authorise the Authorised
Third Party on their behalf and in their name or otherwise to sign or
execute or make any alteration or addition or deletion in or to any
agreements or documents or certificates or instructions or notices which
they are entitled or required to give, receive, implement, transact or
become a party to in relation to the Back-up Functions or for doing any
other act or thing required to be done by them under or in connection with
the Back-up Functions and otherwise generally to sign, seal and deliver
any agreement, assurance, document, certificate, instruction or act which
may be required by the Authorised Third Party acting in connection with
the Back-up Functions.
2. APPOINTMENT AND PAYMENT
The appointment of the Authorised Third Party shall be on the terms and
conditions as negotiated between the Security Trustee, the Seller and/or
the Administrator (as the case may be) and such Authorised Third Party.
The fees, costs and expenses payable to such Authorised Third Party shall
be considered as part of the additional remuneration and expenses of the
Security Trustee and therefore shall be payable in the manner contemplated
by and in accordance with Clause 18 of the Funding Deed of Charge from
funds that the Security Trustee receives in accordance with the Funding
Priority of Payments as set forth in the Funding Deed of Charge.
3. DELEGATION
3.1. The Security Trustee shall use reasonable endeavours (in its opinion) to
appoint in writing one or more persons to act as an Authorised Third Party
in respect of the Back-up Functions (on any terms other than the power to
appoint a delegate), and references in the Operating Agreements to the
"Security Trustee" shall be construed accordingly and, unless the context
does not permit, include any Authorised Third Party. Any such appointment
of an Authorised Third Party may be revoked by the Security Trustee at any
time.
40
3.2. In the event that the Security Trustee has not, having used such
reasonable endeavours, appointed such Authorised Third Party, the Security
Trustee shall have no liability to any person and, notwithstanding any
other provision of the Operating Agreements, shall not itself be required
to perform any Back-up Functions or any other duties of the Seller or the
Administrator either during the period it is seeking to appoint an
Authorised Third Party or thereafter.
3.3. As condition precedents to the appointment of the Authorised Third Party,
the arrangements to be entered into between the Authorised Third Party and
the Seller or Administrator (as the case may be) shall provide that (1)
the Authorised Third Party shall make timely transfer of information to
the Seller or Administrator (as appropriate); and (2) the Security Trustee
shall provide any Authorised Third Party with a copy of the Operating
Agreements and the Funding Deed of Charge and shall request such
Authorised Third Party to confirm in writing to the Seller, the
Administrator and the Security Trustee that it has read and understood the
terms of this Agreement and the other Operating Agreements.
4. RATIFICATION
Each of the Seller and the Administrator shall, upon the written request
of the Security Trustee or such Authorised Third Party, ratify and confirm
all documents, deeds, certificates, instructions, acts and things which
the Security Trustee or such Authorised Third Party shall execute or do in
the exercise of any of the powers conferred, or purported to be conferred,
on him by this Agreement and the other Operating Agreements. The terms of
appointment of the Authorised Third Party shall oblige the Authorised
Third Party to provide information concerning its activities on a regular
basis and on request to the Seller, Administrator, Funding and the
Security Trustee.
5. LIMITATIONS ON THE RESPONSIBILITY OF THE SECURITY TRUSTEE
The Security Trustee shall not be obliged to monitor or supervise the
performance by such Authorised Third Party of its duties hereunder or in
relation to the Operating Agreements and shall not be responsible or
liable for any act or omission of such Authorised Third Party or for any
loss caused thereby, provided that if any party to a Transaction Document
notifies the Security Trustee that an Authorised Third Party appointed by
the Security Trustee is implementing, administering or carrying out the
duties and powers of the Security Trustee in breach of the terms and
conditions of the relevant Operating Agreement pursuant to which such
duties and powers are to be performed, the Security Trustee shall use its
reasonable endeavours to appoint or facilitate the appointment of a
substitute Authorised Third Party to implement, administer and carry out
such duties and powers. The terms of appointment of an Authorised Third
Party and the Security Trustee's responsibilities in relation thereto as
set out in this Schedule 4 shall apply to the appointment of a substitute
Authorised Third Party. Nothing in this Schedule constitutes the Security
Trustee in its role as specified in this schedule as trustee or fiduciary
for any person. The Security Trustee shall assume, until it receives
notice thereof pursuant to the relevant Operating Agreement, that no
Back-up Trigger Event has occurred and until such time that it receives
such notification and is first indemnified and/or secured to its
satisfaction, is not entitled to take any action in respect of the Back-up
Functions under the Operating Agreements.
41
6. EXONERATION
6.1. Without limiting paragraph 6.2 below, the Security Trustee shall not be
liable to any Person for any action taken or not taken by the Security
Trustee or such Authorised Third Party under or in connection with the
Operating Agreements, other than in respect of any loss, liability, claim,
expense or damage suffered or incurred by such Person in respect of the
gross negligence or wilful default of the Security Trustee or such
Authorised Third Party in carrying out its functions under the relevant
Operating Agreement.
6.2. No Person may take any proceedings against any officer, employee or agent
of the Security Trustee in respect of any claim it might have against the
Security Trustee in respect of any act or omission of any kind by their
officer, employee or agent.
42
EXECUTION PAGE
AS ADMINISTRATOR
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
-------------------------
AUTHORISED SIGNATORY
Name:
Title:
AS SELLER
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
-------------------------
AUTHORISED SIGNATORY
Name:
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:
43
