EXHIBIT 4.1
Dated 26 May 2004
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NORTHERN ROCK PLC
as Seller, Cash Manager, and a Beneficiary
GRANITE FINANCE FUNDING LIMITED
as Funding and a Beneficiary
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
- and -
THE BANK OF NEW YORK
as Security Trustee
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MORTGAGES TRUST DEED
NINTH DEED OF AMENDMENT
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SIDLEY XXXXXX XXXXX & XXXX
WOOLGATE EXCHANGE
00 XXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
THIS DEED is made on 26 May 2004
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 03273685), a public limited company
incorporated under the laws of England and Wales whose registered office is
at Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX, in its
capacity as Seller, and in its capacity as Cash Manager and in its capacity
as a Beneficiary;
(2) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out of
its office established in England (registered overseas company number
FC022999 and branch number BR005916) at 00 Xxxx Xxxx, Xxxxxxx XX0 0XX in
its capacity as a Beneficiary;
(3) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands in its capacity as the Mortgages Trustee; and
(4) THE BANK OF NEW YORK, a New York banking corporation whose London branch
address is at One Canada Square, 00xx Xxxxx, Xxxxxx X00 0XX Xxxxxx Xxxxxxx,
in its capacity as Security Trustee.
WHEREAS:
(A) On 26 March 2001 (the "Initial Closing Date"), the Mortgages Trustee
declared the following trusts in respect of the Trust Property (being on
the Initial Closing Date, the sum of (GBP)100 which monies have been
received by, are presently beneficially owned by and are held by the
Mortgages Trustee or to its order).
(B) On the Initial Closing Date, the Mortgages Trustee (acting as principal and
not as agent of any party) agreed, in accordance with the Mortgages Trust
Deed dated 26 March 2001 among the parties hereto (the "Mortgages Trust
Deed") to hold the Trust Property as bare trustee for Funding and the
Seller (each a Beneficiary and together, the "Beneficiaries") upon, with
and subject to the trusts, powers and provisions of the Mortgages Trust
Deed. The Mortgages Trustee receives amounts arising from the Trust
Property and distributes such amounts for the benefit of the Beneficiaries
of the Mortgages Trust. It delegates certain tasks in relation to the
Mortgages Trust to the Administrator and the Cash Manager.
(C) The Seller carries on the business of, inter alia, originating residential
first mortgage loans to individual Borrowers in England, Wales and Scotland
and of managing and administering such mortgage loans. The Seller has sold
and assigned and intends to sell and assign from time to time portfolios of
such mortgage loans to the Mortgages Trustee pursuant to the Mortgage Sale
Agreement entered into on the Initial Closing Date, which mortgage loans
shall be held by the Mortgages Trustee as bare trustee for the
Beneficiaries upon, with and subject to the trusts, powers and provisions
of the Mortgages Trust Deed.
(D) The parties have agreed to amend and restate the Mortgages Trust Deed (the
"First Amended and Restated Mortgages Trust Deed") pursuant to the
provisions set out in a deed of amendment and restatement dated 23 July
2001 (the "First Deed of Amendment and Restatement").
(E) The parties have agreed to amend and restate the First Amended and Restated
Mortgages Trust Deed (the "Second Amended and Restated Mortgages Trust
Deed") pursuant to the provisions set out in a deed of amendment and
restatement dated 28 September 2001 (the "Second Deed of Amendment and
Restatement").
(F) The parties have agreed to amend and restate the Second Amended and
Restated Mortgages Trust Deed (the "Third Amended and Restated Mortgages
Trust Deed") pursuant to the provisions set out in a deed of amendment and
restatement dated 20 March 2002 (the "Third Deed of Amendment and
Restatement").
(G) The parties have agreed to amend and restate the Third Amended Mortgages
Trust Deed (the "Fourth Amended Mortgages Trust Deed") pursuant to the
provisions set out in a deed of amendment and restatement dated 23
September 2002 (the "Fourth Deed of Amendment and Restatement").
(H) The parties have agreed to amend and restate the Fourth Amended Mortgages
Trust Deed (the "Fifth Amended Mortgages Trust Deed") pursuant to the
provisions set out in a deed of amendment and restatement dated 27 January
2003 (the "Fifth Deed of Amendment and Restatement").
(I) The parties have agreed to amend and restate the Fifth Amended Mortgages
Trust Deed (the "Sixth Amended Mortgages Trust Deed") pursuant to the
provisions set out in a deed of amendment and restatement dated 21 May 2003
(the "Sixth Deed of Amendment and Restatement").
(J) The parties have agreed to amend and restate the Sixth Amended Mortgages
Trust Deed (the "Seventh Amended Mortgages Trust Deed") pursuant to the
provisions set out in a deed of amendment and restatement dated 24
September 2003 (the "Seventh Deed of Amendment and Restatement").
(K) The parties have agreed to amend and restate the Seventh Amended Mortgages
Trust Deed (the "Eighth Amended Mortgages Trust Deed") pursuant to the
provisions set out in a deed of amendment and restatement dated 26 January
2004 (the "Eighth Deed of Amendment and Restatement").
(L) The parties now wish to amend and restate the Eighth Amended and Restated
Mortgages Trust Deed.
(M) With effect from the date hereof, the provisions of the Mortgages Trust
Deed, the First Amended and Restated Mortgages Trust Deed, the Second
Amended and Restated Mortgages Trust Deed, the Third Amended and Restated
Mortgages Trust Deed, the Fourth Amended and Restated Mortgages Trust Deed,
the Fifth Amended and Restated Mortgages Trust Deed, the Sixth Amended and
Restated Mortgages Trust Deed, the Seventh Amended and Restated
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Mortgages Trust Deed, the Eighth Amended and Restated Mortgages Trust Deed
and this Deed shall be read and construed as one document.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 The provisions of the Master Definitions Schedule as amended and restated
by (and appearing in Appendix 1 to) the Master Definitions Schedule Eighth
Amendment Deed made on 26 May 2004 between, among others, the parties
hereto (as the same have been and may be amended, varied or supplemented
from time to time with the consent of the parties hereto) are expressly and
specifically incorporated into and shall apply to this Deed.
1.2 The Mortgages Trust Deed as amended and restated pursuant to the First Deed
of Amendment and Restatement, the Second Deed of Amendment and Restatement,
the Third Deed of Amendment and Restatement, the Fourth Deed of Amendment
and Restatement, the Fifth Deed of Amendment and Restatement, the Sixth
Deed of Amendment and Restatement, the Seventh Deed of Amendment and
Restatement, the Eighth Deed of Amendment and Restatement and pursuant
hereto shall be referred to herein as the "Amended and Restated Mortgages
Trust Deed".
1.3 As used in the Amended and Restated Mortgages Trust Deed the terms
"Mortgages Trust Deed", "this Mortgages Trust Deed", "Trust Deed", "this
Trust Deed", "Deed", "this Deed", "herein", "hereinafter", "hereof",
"hereto" and other words of similar import shall mean or refer to the
Amended and Restated Mortgages Trust Deed, unless the context otherwise
specifically requires.
2. AMENDMENTS TO THE EIGHTH AMENDED AND RESTATED MORTGAGES TRUST DEED
Upon execution of this Deed by the parties hereto, the Eighth Amended and
Restated Mortgages Trust Deed shall be and hereby is amended and restated
in the form of Appendix I hereto.
3. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any provision of this Deed or any
provision of the Amended and Restated Mortgages Trust Deed under the
Contract (Rights of Third Parties) Xxx 0000 but this shall not affect any
right or remedy of a third party which exists apart from that Act.
4. Security Trustee
The Security Trustee, for the purposes of Clause 15.2 (Negative Covenants)
of the Funding Deed of Charge, hereby consents to the amendments to the
Eighth Amended and Restated Mortgages Trust Deed and is party to this Deed
solely for the purposes of providing such consent.
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5. COUNTERPARTS
This Deed may be executed in any number of counterparts, and has the same
effect as if the signatures and/or seals on the counterparts were on a
single copy of this Deed.
6. GOVERNING LAW
6.1 This Deed is governed by, and shall be construed in accordance with,
English law.
6.2 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 Deed and, for such purposes, irrevocably submits to
the jurisdiction of such courts.
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EXECUTION PAGE
IN WITNESS WHEREOF this Deed has been executed as a deed and delivered by the
parties hereto on the day and year first above written.
Executed by
NORTHERN ROCK PLC
as its deed as follows:
Signed for and on its behalf by one of its duly
authorised attorneys/signatories By
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Duly Authorised Attorney/Signatory
Name
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Signature
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Witness
Full name
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Occupation
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Address
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Executed by By
GRANITE FINANCE FUNDING LIMITED ----------------------------------------------
as its deed as follows: Director
Signed for and on its behalf by one of its directors Name
and by another of its directors/its secretary ----------------------------------------------
By
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Director/Secretary
Name
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Executed by By
GRANITE FINANCE TRUSTEES LIMITED ----------------------------------------------
as its deed as follows: Director
Signed for and on its behalf by one of its directors Name
and by another of its directors/its secretary ----------------------------------------------
By
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Director/Secretary
Name
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Executed by
THE BANK OF NEW YORK By
as its deed as follows: ----------------------------------------------
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories Name
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Appendix I
Amended and Restated Mortgages Trust Deed
Dated 26 May 2004
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NORTHERN ROCK PLC
as Seller, Cash Manager and a Beneficiary
GRANITE FINANCE FUNDING LIMITED
as Funding and a Beneficiary
- and -
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
----------------------------------------------------------------
NINTH AMENDED
MORTGAGES TRUST DEED
----------------------------------------------------------------
SIDLEY XXXXXX XXXXX & XXXX
WOOLGATE EXCHANGE
00 XXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF:30507-30020/655932
CONTENTS
Clause Page No.
1. Definitions and Construction..............................................2
2. Creation of Mortgages Trust...............................................2
3. Conditions Precedent......................................................3
4. Consideration.............................................................5
5. Increasing and Decreasing the Seller Share of the Trust Property..........8
6. Increasing the Funding Share of the Trust Property........................9
7. Initial Funding Share and Initial Seller Share...........................11
8. Adjustment of Funding Share Percentage and Seller Share Percentage.......11
9. Minimum Seller Share.....................................................24
10. Distribution of Revenue Receipts.........................................26
11. Distribution of Principal Receipts.......................................29
12. Allocation of Losses.....................................................33
13. Overpayments.............................................................34
14. Arrears..................................................................35
15. Ledgers..................................................................35
16. Fees and Expenses of the Mortgages Trustee...............................36
17. Directions from Beneficiaries............................................36
18. Early Termination of the Mortgages Trust.................................38
19. Audit of Mortgage Loans constituting the Trust Property..................38
20. Transfers................................................................38
21. Representations and Covenants............................................39
22. Power to Delegate........................................................40
23. Powers of Investment.....................................................40
24. Other Provisions regarding the Mortgages Trustee.........................41
25. No retirement of Mortgages Trustee.......................................42
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26. Termination..............................................................43
27. Further Assurances.......................................................43
28. No Partnership or Agency.................................................43
29. Calculations.............................................................43
30. Confidentiality..........................................................43
31. Perpetuity Period........................................................44
32. Non Petition Covenant; Limited Recourse..................................44
33. Amendments and Waiver....................................................46
34. Notices..................................................................46
35. Third Party Rights.......................................................47
36. Execution in Counterparts; Severability..................................47
37. Governing Law and Submission to Jurisdiction.............................48
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES.....................................49
ii
THIS NINTH AMENDED MORTGAGES TRUST DEED DATED 26 MAY 2004 FURTHER AMENDS AND
RESTATES THE MORTGAGES TRUST DEED DATED 26 MARCH 2001 BETWEEN:
(1) NORTHERN ROCK PLC (registered number 03273685), a public limited company
incorporated under the laws of England and Wales whose registered office is
at Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX, in its
capacity as Seller, and in its capacity as Cash Manager and in its capacity
as a Beneficiary;
(2) GRANITE FINANCE FUNDING LIMITED (registered number 79308) a private limited
company incorporated under the laws of Jersey, but acting out of its office
established in England (registered overseas company number FC022999 and
branch number BR005916) at 00 Xxxx Xxxx, Xxxxxxx, XX0 0XX in its capacity
as a Beneficiary; and
(3) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) a private
limited company incorporated under the laws of Jersey whose registered
office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands in its capacity as Mortgages Trustee.
WHEREAS:
(A) The Mortgages Trustee wishes to declare the following trusts in respect of
the Trust Property (being on the date of this Deed, the sum of (GBP)100
which monies have been received by, are presently held by the Mortgages
Trustee or to its order).
(B) The Mortgages Trustee (acting as principal and not as agent of any party)
has agreed to hold the Trust Property as bare trustee for the Beneficiaries
upon, with and subject to the trusts, powers and provisions of this Deed.
The Mortgages Trustee will receive amounts arising from the Trust Property
and will distribute such amounts for the benefit of the Beneficiaries of
the Mortgages Trust. It will delegate certain tasks in relation to the
Mortgages Trust to the Administrator and the Cash Manager.
(C) The Seller carries on the business of, inter alia, originating residential
mortgage loans to individual Borrowers in England and Wales and Scotland
and of managing and administering such mortgage loans. The Seller intends
to sell and assign from time to time portfolios of such mortgage loans to
the Mortgages Trustee pursuant to the Mortgage Sale Agreement entered into
on or about 26 March 2001, which mortgage loans shall be held by the
Mortgages Trustee as bare trustee for the Beneficiaries upon, with and
subject to the trusts, powers and provisions of this Deed.
NOW THIS DEED WITNESSES:
1. Definitions and Construction
1.1. The provisions of the Master Definitions Schedule as amended and restated
by (and appearing in Appendix 1 to) the Master Definitions Schedule Eighth
Amendment and Restatement Deed made on 26 May 2004 between, amongst others,
the Seller, Funding and the Mortgages Trustee (as the same have been and
may be amended, varied or supplemented from time to time with the consent
of the parties hereto) are expressly and specifically incorporated into and
shall apply to this Deed.
2. Creation of Mortgages Trust
2.1 Initial Trust Property: The Mortgages Trustee hereby declares itself as
trustee of the Trust Property, being, upon execution of this Deed, the sum
of (GBP)100 (one hundred pounds) (the "Initial Trust Property") which sum
shall be held on trust by the Mortgages Trustee absolutely as to both
capital and income for the benefit, as tenants in common (holding undivided
beneficial interests), of the Seller as to the Initial Seller Share
Percentage and Funding as to the Initial Funding Share Percentage. The
Initial Trust Property shall be held by the Mortgages Trustee on the
Mortgages Trust upon due execution of this Deed by all parties to it.
2.2 Closing Trust Property: Pursuant to the provisions of the Mortgage Sale
Agreement, the Seller intends to sell and assign the Initial Mortgage
Portfolio to the Mortgages Trustee on the Initial Closing Date, which
Initial Mortgage Portfolio including all related rights and benefits shall
form part of the Trust Property (the "Closing Trust Property").
2.3 New Trust Property: From time to time and pursuant to the Mortgage Sale
Agreement, the Seller intends to sell and assign New Mortgage Portfolios to
the Mortgages Trustee, which New Mortgage Portfolios including all related
rights and benefits shall form part of the Trust Property (the "New Trust
Property").
2.4 Other Trust Property:
(a) In accordance with this Deed, from time to time Funding and the Seller
shall, subject to and in accordance with Clause 4 (Consideration),
Clause 5 (Increasing the Seller Share of the Trust Property) and/or
Clause 6 (Increasing the Funding Share of the Trust Property) provide
consideration to the Mortgages Trustee in the form of Contributions to
be applied by the Mortgages Trustee as set out in this Deed. Any
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Contribution so provided to the Mortgages Trustee shall, on receipt by
the Mortgages Trustee and until it has been applied by the Mortgages
Trustee in accordance with the terms of this Deed, form part of the
Trust Property.
(b) Any Re-draws made under a Flexible Mortgage Loan which is included in
the Trust Property will form part of the Trust Property.
(c) Amounts on deposit (and interest earned on such amounts) from time to
time in the Mortgages Trustee Bank Accounts will form part of the
Trust Property.
(d) (If the Seller subsequently decides to retain any Mortgage Loan which
is the subject of a Further Advance within the Trust Property and/or
to sell and assign the Further Advance to the Mortgages Trustee in
accordance with the Mortgage Sale Agreement) any Further Advance made
in respect of a Mortgage Loan in the Trust Property will also form
part of the Trust Property.
(e) Any Permitted Replacement Mortgage Loan and its Related Security
(including the rights under any related MIG Policy and other insurance
policies arranged by the Seller, but excluding any Early Repayment
Charge Receipts paid to the Seller) relating to a Permitted Product
Switch effected in relation to a Mortgage Loan which forms part of the
Trust Property will also form part of the Trust Property.
(f) The proceeds of sale of any Mortgage Loan and its Related Security
forming part of the Trust Property pursuant to the Mortgage Sale
Agreement or other proceeds of sale of any Trust Property will form
part of the Trust Property.
(g) Any Further Draws under a Personal Secured Loan which is included in
the Trust Property will also form part of the Trust Property.
2.5 Payments of Early Repayment Charges: Subject to and in accordance with the
Mortgage Sale Agreement, the Mortgages Trustee will agree to pay to the
Seller any Early Repayment Charge Receipts received by the Mortgage Trustee
in respect of any Mortgage Loan included in the Initial Mortgage Portfolio
or any New Mortgage Portfolio which the Seller sells and assigns to the
Mortgages Trustee. Upon any such payment to the Seller, the benefit of such
Early Repayment Charges will no longer form part of the Trust Property.
3. Conditions Precedent
3.1 Trust Property: Subject to this Clause 3 (Conditions Precedent), the
Mortgages Trustee shall hold the Trust Property as to both capital and
income on trust absolutely for Funding (as to
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the Funding Share) and for the Seller (as to the Seller Share) as tenants
in common upon, with and subject to all the trusts, powers and provisions
of this Deed (such that each Beneficiary shall have an undivided beneficial
interest in the Trust Property). As used herein, "Trust Property" means the
Initial Trust Property, the Closing Trust Property, any New Trust Property,
(but excludes any Early Repayment Charge Receipts which have been paid to
the Seller and any Mortgage Loans which have been repurchased by the Seller
pursuant to the Mortgage Sale Agreement) and all other Trust Property
referred to under Clause 2 (Creation of Mortgages Trust) less (a) any
actual Losses in relation to Mortgage Loans and any actual redemptions
occurring in respect of the Mortgage Loans as described in Clause 8.5
(Adjustments to Trust Property) and (b) distributions of principal made
from time to time to the Beneficiaries.
3.2 Closing Trust Property: The Closing Trust Property shall be held by the
Mortgages Trustee on the Mortgages Trust subject to satisfaction of the
following conditions precedent:
(a) the due execution and delivery of the Mortgage Sale Agreement by all
parties to it;
(b) the due execution and delivery of this Deed by all parties to it;
(c) the satisfaction or waiver in accordance with the terms of the
Mortgage Sale Agreement of the conditions to the sale and assignment
of the Initial Mortgage Portfolio as set out in Clause 2 (Sale and
Purchase of Initial Mortgage Portfolio) and Clause 3 (Initial Closing
Date) of the Mortgage Sale Agreement;
(d) the payment by Funding to the Mortgages Trustee of Funding's Initial
Contribution for the Initial Funding Share Percentage in accordance
with Clause 4 (Consideration); and
(e) the payment by the Mortgages Trustee to the Seller of the Initial
Purchase Price for the sale and assignment to the Mortgages Trustee of
the Initial Mortgage Portfolio.
3.3 New Trust Property: Any New Trust Property shall be held by the Mortgages
Trustee on the Mortgages Trust subject to the satisfaction or waiver in
accordance with the terms of the Mortgage Sale Agreement of the conditions
referred to in Clause 4 (Sale and Purchase of New Mortgage Loan Portfolios)
of the Mortgage Sale Agreement for the transfer of New Mortgage Loan
Portfolios to the Mortgages Trustee.
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4. Consideration
4.1 Consideration provided by Seller: The Seller in its capacity as a
Beneficiary shall provide consideration to the Mortgages Trustee for the
Seller Share in the Trust Property:
(a) on the Initial Closing Date, by selling and assigning to the Mortgages
Trustee the Initial Mortgage Portfolio upon payment by the Mortgages
Trustee to the Seller of the Initial Purchase Price for the Initial
Mortgage Portfolio in accordance with the terms of the Mortgage Sale
Agreement;
(b) on each date after the Initial Closing Date on which (i) New Mortgage
Loans are acquired by the Mortgages Trustee from the Seller in
accordance with the Mortgage Sale Agreement and (ii) the consideration
provided to the Seller for that sale is or includes the covenant of
the Mortgages Trustee to hold the Trust Property on trust for Funding
(as to the Funding Share) and the Seller (as to the Seller Share) in
accordance with the terms of this Deed, by the sale on such date by
the Seller of such New Mortgage Loans either for the payment by the
Mortgages Trustee of the Initial Purchase Price paid on such date or
(if no Initial Purchase Price is paid) without payment on such date;
and
(c) on each date on which the Seller increases the Seller Share of the
Trust Property in accordance with Clause 5 (Increasing and Decreasing
the Seller Share of the Trust Property) below, the Seller will pay the
consideration to the Mortgages Trustee specified in that Clause.
4.2 Consideration provided by Funding: Funding in its capacity as a Beneficiary
shall provide consideration to the Mortgages Trustee for the Funding Share
in the Trust Property:
(a) on the Initial Closing Date, by paying to the Mortgages Trustee the
Initial Contribution in respect of the Closing Trust Property which
shall be equal to (and from which the Mortgages Trustee shall or shall
procure that the Cash Manager on its behalf shall pay) the Initial
Purchase Price in respect of the Initial Mortgage Portfolio payable by
the Mortgages Trustee to the Seller pursuant to the Mortgage Sale
Agreement on such date;
(b) on each Distribution Date, by paying to the Mortgages Trustee a
Deferred Contribution equal to the amount (if any) of:
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(i) Mortgages Trustee Available Revenue Receipts to which Funding is
entitled on such date in accordance with paragraph (d) of Clause
10.2 (Distribution of Mortgages Trustee Available Revenue
Receipts); and
(ii) the amount of any Early Repayment Charge Receipts payable by the
Mortgage Trustee to the Seller under the Mortgage Sale Agreement,
(together the "Relevant Distribution") which shall be equal to (and
from which the Mortgages Trustee shall or shall procure that the Cash
Manager on its behalf shall pay) such amount of Deferred Purchase
Price as is payable by the Mortgages Trustee to the Seller pursuant to
the Mortgage Sale Agreement on such date. The parties to this Deed
agree that on any Distribution Date the Relevant Distribution and the
Deferred Contribution payable by Funding to the Mortgages Trustee
shall be set off against each other such that as between the Mortgages
Trustee and Funding no amount shall be payable in respect of such
Relevant Distribution or such Deferred Contribution on such date and
the Cash Manager on behalf of the Mortgages Trustee shall pay to the
Seller (in satisfaction of the Mortgages Trustee's obligation to pay
Deferred Purchase Price to the Seller under the Mortgage Sale
Agreement) those funds which, were it not for such set-off, would have
been payable to Funding as the Relevant Distribution;
(c) unless Funding has given notice to each relevant Previous Issuer of
its intention to use the proceeds of a New Intercompany Loan to repay
one or more of the Intercompany Loans from the Previous Issuers, and
subject to Clause 6 (Increasing the Funding Share of the Trust
Property) below, on each date after the Initial Closing Date on which
(i) an amount of Initial Purchase Price is payable in respect of New
Mortgage Loans which are sold and assigned by the Seller to the
Mortgages Trustee on such date and (ii) Funding receives the net
proceeds of a New Intercompany Loan from a New Issuer, by paying to
the Mortgages Trustee an Initial Contribution in respect of such New
Trust Property which shall be equal to (and from which the Mortgages
Trustee shall or shall procure that the Cash Manager on its behalf
shall pay) the Initial Purchase Price in respect of such New Mortgage
Loans payable by the Mortgages Trustee to the Seller pursuant to the
Mortgage Sale Agreement on such date;
(d) unless Funding has given notice to each relevant Previous Issuer of
its intention to use the proceeds of a New Intercompany Loan to repay
one or more of the
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Intercompany Loans from the Previous Issuers subject to Clause 6
(Increasing the Funding Share of the Trust Property) below, on each
other date after the Initial Closing Date on which Funding receives
the net proceeds of a New Intercompany Loan from a New Issuer, by
paying to the Mortgages Trustee a Further Contribution in respect of
the Funding Share of the Trust Property which shall be equal to (and
from which the Mortgages Trustee shall or shall procure that the Cash
Manager on its behalf shall pay) the Initial Consideration payable to
the Seller in accordance with Clause 6.3 (Initial Consideration); and
(e) following the Final Repayment Date of the latest maturing Intercompany
Loan made by any Issuer to Funding and provided that there are no
further claims outstanding under any Intercompany Loan or on such
earlier date provided that all Intercompany Loans have either been
repaid in full or there are no further claims outstanding under any
Intercompany Loan, Funding will make a final payment of Deferred
Contribution to the Mortgages Trustee (the "Final Deferred
Contribution") in an amount equal to the aggregate amount standing to
the credit of the Funding Bank Accounts (including any account
established for the purposes of the Issuer Reserve Fund and/or the
Issuer Liquidity Reserve Fund of any Issuer) after making any payments
ranking in priority thereto, subject to and in accordance with the
relevant Funding Priority of Payments. The Final Deferred Contribution
shall be in an amount equal to (and from that Final Deferred
Contribution the Mortgages Trustee shall or shall procure that the
Cash Manager shall on its behalf pay) the final amount of Deferred
Purchase Price payable by the Mortgages Trustee to the Seller pursuant
to and in accordance with the Mortgage Sale Agreement.
4.3 Application by Mortgages Trustee:
(a) If the Mortgages Trustee receives any Initial Contribution, Deferred
Contribution or the Final Deferred Contribution from Funding, the
parties hereto direct the Mortgages Trustee to, and the Mortgages
Trustee covenants that it shall, or shall procure that the Cash
Manager on its behalf shall, pay such funds to the Seller in
satisfaction of the Mortgages Trustee's obligation to make payment of
the Initial Purchase Price or, as the case may be, Deferred Purchase
Price in respect of the Initial Mortgage Portfolio or any New Mortgage
Loans which are sold and assigned to the Mortgages Trustee by the
Seller pursuant to the Mortgage Sale Agreement.
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(b) If the Mortgages Trustee receives a Further Contribution from any
Beneficiary, the parties hereto direct the Mortgages Trustee to, and
the Mortgages Trustee covenants that it shall, or shall procure that
the Cash Manager on its behalf shall, distribute such funds to a
Beneficiary or the Beneficiaries as required at the time and in the
manner and otherwise in accordance with the terms of this Deed.
5. Increasing and Decreasing the Seller Share of the Trust Property
5.1 Re-draws under Flexible Mortgage Loans:
(a) If, in respect of any Flexible Mortgage Loan which is in the Trust
Property, the relevant Borrower requests a Cash Re-draw and the
Administrator (on behalf of the Mortgages Trustee) grants such request
pursuant to and in accordance with the terms of the Administration
Agreement, the Seller as Beneficiary shall fund that Cash Re-draw in
the Mortgages Trust by making payment to the Borrower, in accordance
with the terms and conditions of the relevant Mortgage Loan, of the
Cash Re-draw Amount. Upon payment by the Seller to the relevant
Borrower of the Cash Re-draw Amount, the aggregate Current Balance of
the Mortgage Loans constituting the Trust Property and the amount of
the Seller Share of the Trust Property shall be increased by an amount
equal to the Cash Re-draw Amount.
(b) If, in respect of any Flexible Mortgage Loan which is in the Trust
Property, the relevant Borrower requests a Non-Cash Re-draw and the
Administrator grants such request or the Administrator otherwise
permits the relevant Borrower to take a Non-Cash Re-draw pursuant to
and in accordance with the terms of the Administration Agreement, the
Seller as Beneficiary shall fund such Non-Cash Re-draw in the
Mortgages Trust by making payment to the Mortgages Trustee of a
Further Contribution in an amount equal to the Unpaid Interest Amount
in respect of such Non-Cash Re-draw. Upon payment by the Seller to the
Mortgages Trustee of such Further Contribution, the aggregate Current
Balance of the Mortgage Loans constituting the Trust Property and the
Seller Share of the Trust Property shall be increased by an amount
equal to the amount of the Further Contribution so made to the
Mortgages Trustee. The parties agree that any such Further
Contribution received by the Mortgages Trustee from the Seller will be
treated as Revenue Receipts and will be distributed to the
Beneficiaries on the immediately succeeding Distribution Date in
accordance with Clause 10 (Distribution of Revenue Receipts) below.
5.2 Further Advances: If at a future date the Seller elects not to purchase any
Mortgage Loan
8
which becomes the subject of a Further Advance from the Mortgages Trustee,
the Seller will be solely responsible for funding any such Further Advance
and, subject to the provisions of this Deed, upon the making of such
Further Advance by the Seller, the aggregate Current Balance of the
Mortgage Loans constituting the Trust Property and the Seller Share of the
Trust Property shall be increased by an amount equal to the amount of the
Further Advance paid to the relevant Borrower.
5.3 Together Connections Mortgage Loans and Connections Mortgage Loans: If, in
respect of any Together Connections Mortgage Loan or any Connections
Mortgage Loan which is in the Trust Property, there has been a reduction in
the outstanding balance of such Mortgage Loan from the relevant Borrower
being allocated a portion of the Together Connections Mortgage Benefit or
Connections Benefit (as the case may be) under such Mortgage Loan, the
aggregate Current Balance of the Mortgage Loans constituting the Trust
Property and the amount of the Seller Share of the Trust Property shall be
decreased by an amount equal to the portion of the Together Connections
Benefit or Connections Benefit (as the case may be) allocated to such
Mortgage Loan.
5.4 Further Draws under Personal Secured Loans: If, in respect of any Personal
Secured Loan in the Trust Property which permits Further Draws, the
relevant Borrower requests a Further Draw and the Administrator grants such
request, the Seller will as Beneficiary fund such Further Draw in the
Mortgages Trust by making payment to the Borrower of the Further Draw in
accordance with the terms and conditions of the relevant Personal Secured
Loan. Upon payment by the Seller to the relevant Borrower of such Further
Draw, the aggregate Current Balance of the Mortgage Loans constituting the
Trust Property and the amount of the Seller Share of the Trust Property
shall be increased by an amount equal to the amount of the Further Draw
paid to the relevant Borrower.
6. Increasing the Funding Share of the Trust Property
6.1 Conditions precedent: Subject as provided below, Funding may increase the
Funding Share (as defined in Clause 7.1 (Initial Funding Share) below) of
the Trust Property, subject to satisfaction of the following conditions
precedent:
(a) no Event of Default under the Transaction Documents shall have
occurred which is continuing at the relevant date;
(b) no Intercompany Loan Enforcement Notice has been served in respect of
any Intercompany Loan;
9
(c) the Rating Agencies have confirmed in writing to the Mortgages
Trustee, the Security Trustee and each Issuer that the proposed
increase in the Funding Share of the Trust Property would not
adversely affect the then-current ratings by the Rating Agencies (or
any of them) of the Notes issued by any Issuer;
(d) the New Notes have been issued by the New Issuer, the subscription
proceeds received on behalf of such New Issuer and advanced by such
Issuer to Funding pursuant to an Intercompany Loan Agreement (which
proceeds Funding will pay to the Mortgages Trustee to increase the
Funding Share of the Trust Property on the relevant date in accordance
with Clause 6.2 (Completion));
(e) if necessary, each Issuer, including any New Issuer (if any) has
entered into appropriate hedging arrangements;
(f) as of the last day of the immediately preceding Trust Calculation
Period the aggregate Current Balance of Mortgage Loans in the Trust
Property which were at such time in arrears for at least 3 months is
less than 4 per cent. of the aggregate Current Balance of all Mortgage
Loans in the Trust Property at such time unless the Rating Agencies
have confirmed that the then-current ratings of the Notes will not be
adversely affected;
(g) as of the last day of the immediately preceding Trust Calculation
Period the weighted average LTV ratio of Mortgage Loans in the Trust
Property (after application of the LTV Test) on such date does not
exceed the LTV ratio (based on the LTV Test) of Mortgage Loans in the
Trust Property on the Initial Closing Date plus 0.25 per cent.;
(h) each Issuer Reserve Fund is fully funded on the relevant date up to
the relevant Issuer Reserve Required Amount; and
(i) as at the most recent Payment Date no deficiency was recorded on the
Issuer Principal Deficiency Ledger of any Issuer,
provided always that Funding shall not be entitled to increase the Funding
Share after the Payment Date falling in January 2008 if the option to
redeem the First Issuer Notes on the Payment Date in January 2008 pursuant
Condition 5 of the First Issuer Notes is not exercised.
6.2 Completion: Subject to satisfaction of the conditions precedent set out in
Clause 6.1 (Conditions precedent) above, Funding shall pay to the Mortgages
Trustee the consideration for such increase in the Funding Share in
accordance with Clause 4 (Consideration).
10
6.3 Initial Consideration: The parties hereto agree that Principal Receipts
received by the Mortgages Trustee from Funding in payment of a Further
Contribution in accordance with Clause 4 (Consideration) on any date on
which Funding increases the Funding Share of the Trust Property shall be
allocable and payable by the Mortgages Trustee to the Seller (in its
capacity as a Beneficiary of the Mortgages Trust) as an Initial
Consideration on such date whether or not such date is a Distribution Date.
Any such Initial Consideration shall reduce the Seller Share of the Trust
Property by the amount of the Initial Consideration.
7. Initial Funding Share and Initial Seller Share
7.1 Initial Funding Share: The "Initial Funding Share" of the Trust Property
shall be (GBP)86.61 at the date of this Deed and (GBP)1,500,000,000 at the
Initial Closing Date and the "Initial Funding Share Percentage" shall be
the Initial Funding Share expressed as a percentage of the Trust Property
at such date, that is to say, 86.61 per cent. References herein to the
"Funding Share" shall mean, prior to the first Distribution Date, the
Initial Funding Share and thereafter shall mean the Current Funding Share
(as defined below).
7.2 Initial Seller Share: The "Initial Seller Share" of the Trust Property
shall be the sum which remains of the Trust Property after deduction of the
Initial Funding Share. The Initial Seller Share of the Trust Property will
be (GBP)13.39 at the date of this Deed and (GBP)232,000,000 at the Initial
Closing Date and the "Initial Seller Share Percentage" shall be equal to
100 per cent. minus the Initial Funding Share Percentage, that is to say,
13.39 per cent. The amount of the Initial Seller Share and the Initial
Seller Share Percentage on the Initial Closing will be determined
immediately after the Initial Closing Date. References herein to the
"Seller Share" shall mean, prior to the first Distribution Date, the
Initial Seller Share and thereafter shall mean the Current Seller Share (as
defined below).
7.3 Rounding of percentage shares: Except for the Initial Closing Date on which
the Funding Share Percentage and the Seller Share Percentage shall be
calculated to two decimal places, and unless otherwise agreed by the
Beneficiaries, the Current Funding Share Percentage and the Current Seller
Share Percentage shall be calculated to five decimal places.
8. Adjustment of Funding Share Percentage and Seller Share Percentage
8.1 Effective Periods:
(a) Subject to Clause 8.1(b) below, the Cash Manager will (on behalf of
the Mortgages Trustee and the Beneficiaries) recalculate the Funding
Share, the Funding Share
11
Percentage, the Seller Share and the Seller Share Percentage in
respect of each Trust Calculation Period on the Distribution Date
occurring in such Trust Calculation Period, based on the aggregate
Current Balance of the Mortgage Loans constituting the Trust Property
(as adjusted from time to time) on the last day of the Trust
Calculation Period immediately preceding such Distribution Date.
(b) Notwithstanding Clause 8.1(a) above, if during any Trust Calculation
Period the Seller sells and assigns New Mortgage Loans to the
Mortgages Trustee or if Funding pays a Further Contribution to the
Mortgages Trustee to increase the Funding Share of the Trust Property,
the recalculation of the Funding Share, the Funding Share Percentage,
the Seller Share and the Seller Share Percentage made by the Cash
Manager on the Distribution Date occurring in such Trust Calculation
Period will be effective only in respect of the period beginning on
(and including) the first day of such Trust Calculation Period and
ending on (but excluding) the first Assignment Date or Funding
Contribution Date, as applicable, to occur during such Trust
Calculation Period (such period in respect of such Distribution Date,
an "Interim Calculation Period"), based on the aggregate Current
Balance of the Mortgage Loans constituting the Trust Property (as
adjusted from time to time) on the last day of the Trust Calculation
Period immediately preceding such Distribution Date.
(c) In addition to the foregoing, if during any Trust Calculation Period
the Seller sells and assigns New Mortgage Loans to the Mortgages
Trustee or if Funding pays a Further Contribution to the Mortgages
Trustee to increase the Funding Share of the Trust Property, the Cash
Manager will (on behalf of the Mortgages Trustee and the
Beneficiaries) recalculate the Funding Share, the Funding Share
Percentage, the Seller Share and the Seller Share Percentage on such
Assignment Date or Funding Contribution Date, as applicable, in
respect of the period beginning on (and including) such Assignment
Date or Funding Contribution Date, as applicable, and ending on the
last day of such Trust Calculation Period (and including such last day
of such Trust Calculation Period) (each such period in respect of each
Assignment Date or Funding Contribution Date, as applicable, an
"Interim Calculation Period"), based on the aggregate Current Balance
of the Mortgage Loans constituting the Trust Property (as adjusted
from time to time) on such Assignment Date or Funding Contribution
Date, as applicable.
The parties acknowledge and agree that the Mortgage Sale Agreement provides that
(a) the Seller may not sell and assign New Mortgage Loans to the Mortgages
Trustee during any Trust Calculation
12
Period prior to the Distribution Date in such Trust Calculation Period, and (b)
the Seller may only make one sale and assignment of New Mortgage Loans to the
Mortgages Trustee during any Trust Calculation Period.
8.2 Current Funding Share Percentage:
(a) On each Distribution Date (the "Relevant Distribution Date"), the
"Current Funding Share Percentage" will be calculated by the Cash
Manager in respect of the then-current Trust Calculation Period or
related Interim Calculation Period, as applicable, for the purpose of
calculating the distributions to be made from the Trust Property on
the immediately succeeding Distribution Date, and such Current Funding
Share Percentage will be an amount, expressed as a percentage
(calculated to an accuracy of five decimal places (rounded upwards)),
equal to:
A-B-C+D
------- x 100
G
where,
A = the Current Funding Share as calculated (a) on the later of the
Distribution Date, the Assignment Date or Funding Contribution
Date (if any) immediately preceding such Relevant Distribution
Date, or (b) in the case of the first Distribution Date, the
Initial Funding Share as at the Initial Closing Date;
B = the amount of any Principal Receipts distributed to Funding on
such Relevant Distribution Date in accordance with the provisions
described in Clause 11 (Distribution of Principal Receipts)
below;
C = the amount of any Losses sustained on the Mortgage Loans during
the Trust Calculation Period immediately preceding such Relevant
Distribution Date and the amount of any reductions occurring in
respect of the Mortgage Loans as described in paragraphs (a)
through (e) of Clause 8.5 (Adjustments to Trust Property)
(inclusive) below which have been allocated to Funding in the
Trust Calculation Period ending on the Relevant Distribution Date
(based on (a) the Funding Share Percentage thereof calculated on
the Distribution Date immediately preceding such Relevant
Distribution Date (provided that the Seller had not sold and
assigned New Mortgage Loans to the Mortgages
13
Trustee or that Funding had not paid a Further Contribution to
the Mortgages Trustee in the Trust Calculation Period immediately
preceding such Relevant Distribution Date), or (b) to the extent
that the Seller had sold and assigned New Mortgage Loans to the
Mortgages Trustee or that Funding had paid a Further Contribution
to the Mortgages Trustee during the Trust Calculation Period
immediately preceding such Relevant Distribution Date, the
Weighted Average Funding Share Percentage (as defined below)
thereof calculated on such Relevant Distribution Date prior to
the distribution to be made on such Relevant Distribution Date,
or (c) in the case of the first Distribution Date, the Initial
Funding Share Percentage);
D = an amount equal to any Capitalised Arrears which have been
allocated to Funding during the Trust Calculation Period
immediately preceding such Relevant Distribution Date (based on
the Funding Share Percentage thereof calculated on the
Distribution Date immediately preceding such Relevant
Distribution Date or, in the case of the first Distribution Date,
the Initial Funding Share Percentage);
G = the amount of the Mortgages Trustee Retained Principal Receipts
(if any) plus the aggregate Current Balance of all the Mortgage
Loans in the Trust Property as at the last day of the Trust
Calculation Period immediately preceding such Relevant
Distribution Date or, if applicable, on the relevant Assignment
Date or Funding Contribution Date, after making the
distributions, allocations and additions referred to in (B), (C)
and (D) above and after taking account of the following (being
"Trust Property Calculation Adjustments") (i) any distribution of
Principal Receipts to the Seller and to Funding, (ii) the amount
of any Losses allocated to the Seller and to Funding, (iii) the
adjustments referred to in paragraphs (a) through (e) of Clause
8.5 (Adjustments to Trust Property) (inclusive) below; (iv) the
amount of any other additions to or removals from the Trust
Property during such Trust Calculation Period, including without
limitation, any additions to the Trust Property resulting from
Cash Re-draws, Non-Cash Redraws and Further Draws by Borrowers
under Flexible Mortgage Loans which are in the Trust Property or
(if the Seller subsequently elects not to repurchase Mortgage
Loans which are the subject of Further Advances from the
Mortgages Trustee) Further Advances sold and assigned by the
Seller; but excluding the addition of mortgage loans on an
Assignment Date and any
14
Initial Contribution or Further Contribution made by Funding
during such Trust Calculation Period and (v) any reduction in the
outstanding principal balances of Together Connections Mortgage
Loans and Connections Mortgage Loans resulting from Borrowers
being allocated a portion of the related Together Connections
Benefit and Connections Benefit, respectively under such Mortgage
Loans.
(b) If during any Trust Calculation Period the Seller sells and assigns
New Mortgage Loans to the Mortgages Trustee, the Cash Manager will
recalculate the Current Funding Share Percentage on each such
Assignment Date which is not also a Funding Contribution Date (the
"Relevant Assignment Date") in respect of the related Interim
Calculation Period, for the purposes of calculating the distributions
to be made from the Trust Property on the immediately succeeding
Distribution Date and determining the amount of losses to be allocated
to Funding, and such Current Funding Share Percentage will be an
amount, expressed as a percentage (calculated to an accuracy of five
decimal places (rounded upwards)), equal to:
A+E
--- x 100
H
where,
A = the Current Funding Share as calculated on the Distribution Date
immediately preceding such Relevant Assignment Date;
E = an amount equal to any Initial Contribution paid by Funding to
the Mortgages Trustee on such Relevant Assignment Date in
relation to the Funding Share of any New Mortgage Loans assigned
to the Mortgages Trustee on such Relevant Assignment Date (which
amount the Mortgages Trustee is required pursuant to Clause 4.3
(Application by Mortgages Trustee) to pay to the Seller in
satisfaction of the Mortgages Trustee's obligation to pay to the
Seller the Initial Purchase Price in respect of New Mortgage
Loans sold and assigned to the Mortgages Trustee on such Relevant
Assignment Date); and
H = the amount of the Mortgages Trustee Retained Principal Receipts
(if any), plus the aggregate Current Balance of all the Mortgage
Loans in the Trust Property as at the Distribution Date
immediately preceding such Relevant Assignment Date (after making
the distributions, allocations and additions on that preceding
Distribution Date), plus the aggregate Current Balance of the New
Mortgage Loans sold and
15
assigned to the Mortgages Trustee on such Relevant Assignment
Date and after taking account of Trust Property Calculation
Adjustments.
(c) If during any Trust Calculation Period Funding pays a Further
Contribution to the Mortgages Trustee to increase the Funding Share of
the Trust Property, the Cash Manager will recalculate the Current
Funding Share Percentage on each such Funding Contribution Date (the
"Relevant Funding Contribution Date") in respect of the related
Interim Calculation Period, for the purposes of calculating the
distributions to be made from the Trust Property and determining the
amount of losses to be allocated to Funding on the immediately
succeeding Distribution Date, and such Current Funding Share
Percentage will be an amount, expressed as a percentage (calculated to
an accuracy of five decimal places (rounded upwards)), equal to:
A+E+F
----- x 100
J
where,
A = the Current Funding Share as calculated on the Distribution Date
immediately preceding such Relevant Funding Contribution Date;
E = (1) if that Relevant Funding Contribution Date is also an
Assignment Date, the amount of any Initial Contribution paid by
Funding to the Mortgages Trustee on that Funding Contribution
Date in respect of the Funding Share of any New Trust Property,
and (2) in all other cases, zero;
F = an amount equal to any Further Contribution paid by Funding to
the Mortgages Trustee on such Relevant Funding Contribution Date
to increase Funding's beneficial interest in the Trust Property;
and
J = the amount of the Mortgages Trustee Retained Principal Receipts
(if any) plus the aggregate Current Balance of all the Mortgage
Loans in the Trust Property as at the Distribution Date
immediately preceding such Relevant Funding Contribution Date
(after making the distributions, allocations and additions on
that preceding Distribution Date) plus the aggregate Current
Balance of the New Mortgage Loans sold and assigned to the
Mortgages Trustee on that Relevant Assignment Date and after
taking account of Trust Property Calculation Adjustments.
8.3 Weighted Average Funding Share Percentage: On any Distribution Date in
respect to which
16
(i) the Seller had sold and assigned New Mortgage Loans to the Mortgages
Trustee, or (ii) Funding had paid a Further Contribution to the Mortgages
Trustee to increase the Funding Share of the Trust Property, during the
Trust Calculation Period immediately preceding such Distribution Date, the
Cash Manager (on behalf of the Beneficiaries) will calculate (for the sole
purpose of making the distributions to be made on such Distribution Date)
the weighted average of the Current Funding Share Percentages that were
calculated previously in respect of each Interim Calculation Period
occurring in such immediately preceding Trust Calculation Period based on
the amount of Revenue Receipts and Principal Receipts received and Losses
sustained during each such Interim Calculation Period. The "Weighted
Average Funding Share Percentage" for any such Distribution Date will be
equal to:
(a) in respect of the distribution of Revenue Receipts to be made on such
Distribution Date, an amount determined in accordance with the formula
set forth below:
(AxB)+(CxD)
where,
A = the related Current Funding Share Percentage for Interim
Calculation Period 1;
B = the number of days in Interim Calculation Period 1 divided by the
number of days in the Trust Calculation Period;
C = the related Funding Share Percentage for Interim Calculation
Period 2; and
D = the number of days in Interim Calculation Period 2 divided by the
number of days in the Trust Calculation Period;
(b) in respect of the distribution of Principal Receipts to be made on
such Distribution Date, an amount determined in accordance with the
formula set forth below:
(AxB)+(CxD)
where,
A = the related Current Funding Share Percentage for Interim
Calculation Period 1;
B = the number of days in Interim Calculation Period 1 divided by the
number of days in the Trust Calculation Period;
17
C = the related Funding Share Percentage for Interim Calculation
Period 2; and
D = the number of days in Interim Calculation 2 Period divided by the
number of days in the Trust Calculation Period;
(c) in respect of the allocation of Losses to be made on such Distribution
Date, an amount determined in accordance with the formula set forth
below:
(A x B) + (C x D)
where,
A = the Related Current Funding Share Percentage for Interim
Calculation Period 1;
B = the number of days in Interim Calculation Period 1 divided by the
number of days in the Trust Calculation Period;
C = the related Funding Share Percentage for Interim Calculation
Period 2; and
D = the number of days in Interim Calculation Period 2 divided by the
number of days in the Trust Calculation Period;
8.4 Current Funding Share:
(a) On each Distribution Date, the "Current Funding Share" will be
calculated by the Cash Manager in respect of the then-current Trust
Calculation Period or the related Interim Calculation Period, as
applicable, and will be an amount equal to:
A - B - C + D
where "A", "B", "C" and "D" have the meanings specified in Clause
8.2(a) above.
(b) On each Assignment Date (which is not also a Funding Contribution
Date), the Current Funding Share will be calculated by the Cash
Manager in respect of the related Interim Calculation Period and will
be an amount equal to:
A + E
where "A" and "E" have the meanings specified in Clause 8.2(b) above.
18
(c) On each Funding Contribution Date, the Current Funding Share will be
calculated by the Cash Manager in respect of the related Interim
Calculation Period and will be an amount equal to:
A + E + F
where "A", "E" and "F" have the meanings specified in Clause 8.2(c)
above.
8.5 Adjustments to Trust Property: If any of the following events has occurred
during a Trust Calculation Period, then (subject to the Cash Manager
receiving notice or otherwise being aware of the occurrence of the event)
for the purposes of making the Trust Property Calculation Adjustments, the
aggregate Current Balance of the Mortgage Loans constituting the Trust
Property shall be reduced or, as the case may be, deemed to be reduced:
(a) any Borrower exercises a right of set-off in relation to any Mortgage
Loan in the Trust Property so that the amount of principal and/or
interest owing under such Mortgage Loan is reduced but no
corresponding payment is received by the Mortgages Trustee, in which
event the aggregate Current Balance of the Mortgage Loans constituting
the Trust Property shall be reduced by an amount equal to the amount
so set-off by such Borrower; and/or
(b) a Mortgage Loan or (as applicable) its Related Security (i) is in
breach of the Representations and Warranties in the Mortgage Sale
Agreement as at the Initial Closing Date or, as the case may be, the
relevant Assignment Date or (ii) is the subject of a Product Switch or
a Further Advance or in respect of which the Borrower has accepted an
offer by the Seller of a Personal Secured Loan in respect of which the
Seller has elected to purchase the relevant Mortgage Loan or Mortgage
Loans and Related Security, and in the case of (i) above the Seller
fails to repurchase and in the case of (ii) above the Seller fails to
purchase, the relevant Mortgage Loan or Mortgage Loans under the
relevant Mortgage Account and their Related Security as required by
the terms of the Mortgage Sale Agreement; in which event the aggregate
Current Balance of the Mortgage Loans constituting the Trust Property
shall be deemed to be reduced for the purposes of making the Trust
Property Calculation Adjustments by an amount equal to the Current
Balance of the relevant Mortgage Loan or Mortgage Loans under the
relevant Mortgage Account (together with Arrears of Interest and
Accrued Interest) which the Seller has failed to repurchase or
purchase, as applicable; and/or
19
(c) the Security Trustee is notified that a Flexible Mortgage Loan or part
thereof has been determined by a court judgment on the point or as a
result of a determination by a relevant regulatory authority (whether
or not in relation to an analogous flexible mortgage loan product of
another UK mortgage lender):
(i) to be unenforceable; and/or
(ii) not to fall within the first ranking charge by way of legal
mortgage or first ranking standard security over the relevant
Mortgaged Property,
and, in either case, such Flexible Mortgage Loan is not otherwise
subject to the repurchase obligation under the Mortgage Sale
Agreement, in which event, the aggregate Current Balance of the
Mortgage Loans constituting the Trust Property shall be deemed to be
reduced for the purposes of making the Trust Property Calculation
Adjustments by an amount equal to that portion of the Current Balance
of the Flexible Mortgage Loan which is so determined to be
unenforceable or not to fall within the first ranking charge by way of
legal mortgage or first ranking standard security over the relevant
Mortgaged Property; and/or
(d) (i) in respect of breaches of Representations and Warranties in the
Mortgage Sale Agreement, the Seller would be required to repurchase a
Mortgage Loan and its Related Security and (ii) in respect of a
Mortgage Loan subject to a Further Advance or a Product Switch or in
respect of which the Borrower has accepted an offer by the Seller of a
Personal Loan, the Seller elects to purchase the relevant Mortgage
Loan or Mortgage Loans under the relevant Mortgage Account and their
Related Security in accordance with the terms of the Mortgage Sale
Agreement, but such Mortgage Loan and its Related Security are not
capable of being repurchased or purchased, as applicable; in which
event the aggregate Current Balance of the Mortgage Loans constituting
the Trust Property shall be deemed to be reduced for the purposes of
making the Trust Property Calculation Adjustments by an amount equal
to the Current Balance of the relevant Mortgage Loan (together with
Arrears of Interest and Accrued Interest) which is not capable of
being repurchased or purchased, as applicable; and/or
(e) the Seller breaches any other material warranty under the Mortgage
Sale Agreement and/or (for so long as it is the Administrator) the
Administration Agreement, in which event the aggregate Current Balance
of Mortgage Loans constituting the Trust Property shall be deemed for
the purposes of making the Trust Property Calculation
20
Adjustments to be reduced by an amount equivalent to all losses,
costs, liabilities, claims, expenses and damages incurred by the
Beneficiaries as a result of such breach.
The reductions and deemed reductions set out in paragraphs (a), (b), (c),
(d) and (e) of this Clause and any resulting loss shall, subject to Clause
9.1 (Initial Minimum Seller Share), be allocated on the relevant
Distribution Date, Assignment Date or Funding Contribution Date (as
applicable) first to the Seller Share of the Trust Property (or for the
purposes of calculating the Seller Share of the Trust Property as the case
may be) until the Seller Share is zero and thereafter shall be allocated to
the Funding Share of the Trust Property. If at, or any time after the
Initial Closing Date the Mortgages Trustee holds, or there is held to its
order, or it receives, or there is received to its order, any property,
interest, right or benefit relating to the whole or that portion of any
Mortgage Loan and its Related Security which is or has been subject to any
matter described in paragraphs (a) through (e) above and in respect of
which the Seller Share of the Trust Property has been reduced or deemed
reduced such property, interest, right or benefit will constitute a Revenue
Receipt and the Mortgages Trustee will remit, assign or transfer the same
to Funding (but only if and to the extent that the related reductions or
deemed reductions were applied against the Funding Share of the Trust
Property) and thereafter to the Seller, as the case may require, and until
it does so or to the extent that the Mortgage Trustee is unable to effect
such remittance, assignment or transfer, the Mortgages Trustee will hold
such property, interest, right or benefit and/or the proceeds thereof upon
trust absolutely for Funding and/or the Seller (separate from the Mortgages
Trust), as the case may require.
8.6 Current Seller Share Percentage:
(a) On each Distribution Date, the "Current Seller Share Percentage" will
be calculated by the Cash Manager in respect of the then-current Trust
Calculation Period or the related Interim Calculation Period, as
applicable, and the distributions to be made from the Trust Property
on the immediately succeeding Distribution Date, and will be a
percentage equal to:
100% - Current Funding Share Percentage
where the Current Funding Share Percentage is calculated on such
Distribution Date in accordance with Clause 8.2(a) above.
21
(b) On each Assignment Date, the Cash Manager will recalculate the Current
Seller Share Percentage in respect of the related Interim Calculation
Period and the distributions to be made from the Trust Property on the
immediately succeeding Distribution Date and will be a percentage
equal to:
100% - Current Funding Share Percentage
where the Current Funding Share Percentage is as calculated on such
Assignment Date in accordance with Clause 8.2(b) above.
(c) On each Funding Contribution Date, the Cash Manager will recalculate
the Current Seller Share Percentage in respect of the related Interim
Calculation Period and the distributions to be made from the Trust
Property on the immediately succeeding Distribution Date and will be a
percentage equal to:
100% - Current Funding Share Percentage
where the Current Funding Share Percentage is as calculated on such
Funding Contribution Date in accordance with Clause 8.2(c) above.
8.7 Weighted Average Seller Share Percentage: On any Distribution Date in
respect to which (i) the Seller had sold and assigned New Mortgage Loans to
the Mortgages Trustee, or (ii) Funding had paid a Further Contribution to
the Mortgages Trustee to increase the Funding Share of the Trust Property,
during the Trust Calculation Period immediately preceding such Distribution
Date, the Cash Manager will calculate (for the sole purpose of making the
distributions to be made on such Distribution Date) the weighted average of
the Seller Share Percentages that were calculated previously in respect of
the Revenue Receipts and Principal Receipts received, and Losses sustained,
during each Interim Calculation Period occurring in such immediately
preceding Trust Calculation Period and will be a percentage equal to:
(a) in respect of the distribution of Revenue Receipts to be made on such
Distribution Date:
100% - Weighted Average Funding Share Percentage
where such Weighted Average Funding Share Percentage is as calculated
in Clause 8.3(a) above;
22
(b) in respect of the distribution of Principal Receipts to be made on
such Distribution Date:
100% - Weighted Average Funding Share Percentage
where such Weighted Average Funding Share Percentage is as calculated
in Clause 8.3(b) above; and
(c) in respect of the allocation of Losses to be made on such Distribution
Date:
100% - Weighted Average Funding Share Percentage
where such Weighted Average Funding Share Percentage is as calculated
in Clause 8.3(c) above.
8.8 Current Seller Share:
(a) On each Distribution Date, the "Current Seller Share" will be
calculated by the Cash Manager in respect of the then-current Trust
Calculation Period or the related Interim Calculation Period, as
applicable, and will be an amount equal to:
The aggregate amount of the Trust Property as at the Relevant Distribution Date
- Current Funding Share
where "Current Funding Share" has the meaning given in Clause 8.4(a)
above.
(b) On each Assignment Date, the Current Seller Share will be calculated
by the Cash Manager in respect of the related Interim Calculation
Period and will be an amount equal to:
The aggregate amount of the Trust Property as at the Relevant Assignment Date -
Current Funding Share
where "Current Funding Share" has the meaning given in Clause 8.4(b)
above.
(c) On each Funding Contribution Date, the Current Seller Share will be
calculated by the Cash Manager in respect of the Interim Calculation
Period and will be an amount equal to:
The aggregate amount of the Trust Property as at the Relevant Funding
Contribution Date - Current Funding Share
where "Current Funding Share" has the meaning given in Clause 8.4(c)
above.
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8.9 Funding Share/Seller Share: Neither the Funding Share nor the Seller Share
may be reduced below zero. At all times the Funding Share Percentage and
the Seller Share Percentage shall be equal to 100 per cent. of the Trust
Property.
9. Minimum Seller Share
9.1 Initial Minimum Seller Share: The Seller Share of the Trust Property
includes an amount equal to the Minimum Seller Share. Unless and until the
Funding Share of the Trust Property is in an amount equal to zero, or
following the occurrence of an Asset Trigger Event, the Seller will not be
entitled to receive Mortgages Trustee Principal Receipts which would reduce
the Seller Share of the Trust Property to an amount less than the Minimum
Seller Share and the Seller consents and directs the Mortgages Trustee
accordingly.
9.2 Fluctuation of Minimum Seller Share on each Distribution Date:
At the Initial Closing Date, the Minimum Seller Share will be
(GBP)50,000,000. The amount of the Minimum Seller Share will be
recalculated on each Distribution Date in accordance with the following
formula:
W + X + Y + Z
where:
W = 100% of the sum of the average cleared credit balance of all
applicable accounts linked to Together Connections Mortgage
Loans and Connections Mortgage Loans in respect of each
calendar month or any part of any such calendar month.
X = 2.0% of the aggregate Current Balance of all Mortgage Loans
comprised in the Trust Property as at the last day of the
immediately preceding Trust Calculation Period;
Y = the product of: p x q x r where:
p = 8%;
q = the sum of (i) the "Flexible Cash Re-Draw Capacity",
being an amount equal to the difference between (1) the
maximum amount of Cash Re-draws that Borrowers may draw
under Flexible Mortgage Loans included in the Trust
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Property (whether or not drawn) as at the last day of
the immediately preceding Trust Calculation Period and
(2) the aggregate Current Balance of Cash Re-draws
which form part of the Trust Property as at the last
day of the immediately preceding Trust Calculation
Period; and (ii) the "Further Draw Capacity", being an
amount equal to the difference between (1) the maximum
amount of Further Draws that Borrower may make under
Personal Secured Loans included in the Trust Property
(whether or not drawn) as at the last day of the
immediately preceding Trust Calculation Period and (2)
the aggregate Current Balance of Personal Secured Loans
which form part of the Trust Property as at the last
day of the immediately preceding Trust Calculation
Period; and
r = 3; and
Z = the aggregate Current Balance of (i) Re-Draws and (ii)
Personal Secured Loans in the Trust Property as at the
last day of the immediately preceding Trust Calculation
Period.
9.3 Recalculation of Minimum Seller Share following occurrence of exceptional
events: The calculation of the Minimum Seller Share in accordance with
Clause 9.2 (Fluctuation of Minimum Seller Share on each Distribution Date)
above will be recalculated by the Cash Manager with the agreement of the
parties hereto subject to the approval of the Rating Agencies if the Seller
merges or otherwise combines its business with another bank or other
financial institution so as to increase the risks associated with Borrowers
holding deposits in Northern Rock accounts.
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10. Distribution of Revenue Receipts
10.1 Distribution of Third Party Amounts: Pursuant to the Cash Management
Agreement, the Cash Manager (at the direction of the Mortgages Trustee
acting on behalf of the Beneficiaries at their direction and with their
consent which is hereby given) will deduct, as and when identified, Third
Party Amounts from the Revenue Receipts standing to the credit of the
Mortgages Trustee GIC Account or other Mortgages Trustee Bank Account, and
pay over the same to the proper recipients thereof. The Mortgages Trustee
and the Beneficiaries hereby consent to such deductions.
10.2 Distribution of Mortgages Trustee Available Revenue Receipts: Subject as
provided in Clause 8.8 (Adjustments on Distribution Dates), on each
Distribution Date the Cash Manager (at the direction of the Mortgages
Trustee acting on behalf of the Beneficiaries at their direction and with
their consent which is hereby given) will distribute Mortgages Trustee
Available Revenue Receipts as follows:
(a) firstly, in no order of priority between them but in or towards
satisfaction pro rata according to the respective amounts due of:
(i) any fees, costs, charges, liabilities and expenses then due or to
become due to the Mortgages Trustee under the provisions of this
Deed together with (if applicable) VAT thereon (to the extent not
already included) as provided herein; and
(ii) any amounts due and payable by the Mortgages Trustee to third
parties in respect of the Mortgages Trust but only if incurred
without breach by the Mortgages Trustee of the documents to which
it is a party and payment has not been provided for elsewhere;
(b) secondly, in no order of priority between them but in or towards
satisfaction pro rata according to the respective amounts due of:
(i) any remuneration then due and payable to the Administrator and
any costs, charges, liabilities and expenses then due or to
become due to the Administrator under the provisions of the
Administration Agreement prior to the immediately succeeding
Distribution Date, in each case together with (if applicable) VAT
thereon (to the extent not already included) as provided therein;
and
26
(ii) any remuneration then due and payable to the Cash Manager and any
costs, charges, liabilities and expenses then due or to become
due to the Cash Manager under the provisions of the Cash
Management Agreement prior to the immediately succeeding
Distribution Date, in each case together with (if applicable) VAT
thereon (to the extent not already included) as provided therein;
(c) thirdly, in no order of priority between them but in proportion to the
respective amounts due, and subject to the proviso below, to allocate
and pay Mortgages Trustee Available Revenue Receipts to:
(i) (subject as provided in Clause 8.8 (Adjustments on Distribution
Dates)) the Seller in an amount determined by multiplying the
total amount of the remaining Mortgages Trustee Available Revenue
Receipts by the Current Seller Share Percentage of the Trust
Property, as determined on the immediately preceding Distribution
Date or, in the case of the first Distribution Date, immediately
following the relevant Closing Date, as of such Closing Date; and
(ii) (subject as provided in Clause 8.8 (Adjustments on Distribution
Dates)) Funding in an amount which is equal to the lesser of:
(A) an amount determined by multiplying the total amount of the
remaining Mortgages Trustee Available Revenue Receipts by
the Current Funding Share Percentage of the Trust Property,
as determined on the immediately preceding Distribution Date
or, in the case of the first Distribution Date, the Initial
Funding Share Percentage); and,
(B) the aggregate of the amounts to be applied on the
immediately succeeding Payment Date for Group 1 Issuers and
the immediately succeeding Payment Date for Group 2 Issuers
as set forth under the Funding Pre-Enforcement Revenue
Priority of Payments or the Funding Post-Enforcement
Priority of Payments (but excluding any principal amount due
under any Intercompany Loan (save that, for the avoidance of
doubt, such exclusion shall not apply in respect of any
Funding Available Revenue Receipts which are applied by an
Issuer to credit that Issuer's Principal Deficiency Ledger
and thereby
27
reduce the principal payable under that Issuer's
Intercompany Loan) and any of Deferred Contribution amount
due under Item (P) of the Funding Pre-Enforcement Revenue
Priority of Payments and/or Item (F) of the Funding
Post-Enforcement Priority of Payments), less all other
amounts (not derived from the distribution of Mortgages
Trustee Available Revenue Receipts under this Deed) which
will constitute Funding Available Revenue Receipts on the
immediately succeeding Payment Date such amount not to be
less than zero; and
(d) finally, to allocate to Funding but pay at the direction of Funding to
the Seller an amount equal to YY - ZZ, where "YY" is the amount of the
Mortgages Trustee Available Revenue Receipts and "ZZ" is the amount of
such Mortgages Trustee Available Revenue Receipts applied and/or
allocated under items (a) to (c) above, such amount to be in
satisfaction of amounts of Deferred Purchase Price due to the Seller
under the terms of the Mortgage Sale Agreement;
PROVIDED THAT if an Assignment Date or a Funding Contribution Date has occurred
during the Trust Calculation Period immediately preceding such Distribution
Date, then the Cash Manager will use (i) the Weighted Average Seller Share
Percentage (instead of the Current Seller Share Percentage) as calculated
pursuant to Clause 8.7(a) above in determining the amount of Mortgages Trustee
Available Revenue Receipts to distribute to the Seller pursuant to Clause
10.2(c)(i) above, and (ii) the Weighted Average Funding Share Percentage
(instead of the Current Funding Share Percentage) as calculated pursuant to
Clause 8.3(a) above in determining the amount of Mortgages Trustee Available
Revenue Receipts to distribute to Funding pursuant to Clause 10.2(c)(ii)(A)
above.
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11. Distribution of Principal Receipts
11.1 Distribution of Principal Receipts prior to the occurrence of a Trigger
Event: Subject as provided in Clause 8.8 (Adjustments on Distribution
Dates), prior to the occurrence of a Trigger Event (and whether or not
there has been an enforcement of the Funding Security or any Issuer
Security), on each Distribution Date (or, in respect of any Initial
Consideration, on any Funding Contribution Date), the Cash Manager (at the
direction of the Mortgages Trustee acting on behalf of the Beneficiaries at
their direction and with their consent which is hereby given) shall,
subject to the provisos below, allocate and distribute Mortgages Trustee
Principal Receipts as follows:
(a) first, to the Seller an amount in respect of any Initial Consideration
(if any) which is then allocable and payable to the Seller under
Clause 6.3 (Initial Consideration) above;
(b) second, to Funding an amount in respect of each Issuer which is equal
to the lesser of:
(i) (1) prior to the occurrence of an ACA Trigger Event, the
principal amount due on the Intercompany Loan of such Issuer
equal to the Controlled Amortisation Amounts due, if any, on
such Issuer's Payment Date immediately succeeding such
Distribution Date (in each case determined on the assumption
that the Issuer Reserve Requirement, the Issuer Arrears Test
and the Subordinated Principal Test (as applicable) are
satisfied on such date; that the Controlled Amortisation
Amount is the relevant amount as set forth in the tables
contained in Schedule 4 to the Current Issuer Cash
Management Agreement; and that the proviso appearing at the
end of such tables does not apply); and
(2) upon and after the occurrence of an ACA Trigger Event, (x)
in respect of each Issuer that is not an ACA Issuer, an
amount as set forth in (i)(1) above; and (y) in respect of
each ACA Issuer, up to an amount equal to the ACA Limit
Amount in respect of such ACA Issuer; and
(ii) an amount in respect of each Issuer equal to:
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Current Funding Share Outstanding Principal Balance
Percentage as calculated on the on such Issuer's Intercompany Loan
immediately preceding -----------------------------------
Mortgages Trustee Distribution Date (or, in the Aggregate Outstanding
Principal Receipts x case of the first Distribution x Principal Balance on all
Date following the Closing Date Intercompany Loans
in respect of such Issuer, as
of the relevant Closing Date)
(c) third,
(i) prior to the occurrence of an ACA Trigger Event, to Funding an
amount in respect of each Issuer towards any principal amount
remaining which will be due and payable (following the payment to
Funding set forth in (b) above) on such Issuer's immediately
succeeding Payment Date under such Issuer's Intercompany Loan (in
each case determined on the assumption that the Issuer Reserve
Requirement, the Issuer Arrears Test and the Subordinated
Principal Test (as applicable) are satisfied on such date; that
the Controlled Amortisation Amount is the relevant amount as set
forth in the tables contained in Schedule 4 to the Current Issuer
Cash Management Agreement; and that the proviso appearing at the
end of such tables does not apply) plus an amount equal to the
amount which Funding will be required to apply on that Payment
Date under item (1)(A) or (2)(A) of the Funding Pre-Enforcement
Principal Priority of Payments (to the extent not already funded
under (B)(1) of such priority of payments); and
(ii) upon and after the occurrence of an ACA Trigger Event, to Funding
(x) in respect of an Issuer that is not an ACA Issuer, an amount
as set forth in (c)(i) above and (y) in respect of each ACA
Issuer (following the payment to Funding set forth in (b) above)
up to an amount equal to the ACA Limit Amount in respect of such
ACA Issuer plus an amount equal to the amount which Funding will
be required to apply on that Payment Date under item (1)(A) or
(2)(A) of the Funding Pre-Enforcement Principal Priority of
Payments; and
(d) last, if such Distribution Date is not a Seller Share Event
Distribution Date, all remaining Mortgages Trustee Principal Receipts
to the Seller (as Beneficiary),
PROVIDED THAT in relation to (a) through (d) above the following rules (the
"Rules for the application of Mortgages Trustee Principal Receipts") shall
apply:
(1) If the Notes of any Issuer have become immediately due and payable as a
result of the service of a Note Enforcement Notice or if the Intercompany
Loan of any Issuer (and the other Intercompany Loans of any other Issuers)
have become immediately due and payable as a result of the service of an
Intercompany Loan Enforcement Notice, principal payments in respect of the
Intercompany Loan of that Issuer may be made in excess of any Controlled
30
Amortisation Amount and paragraph (b)(i) above shall no longer apply in
relation to that Issuer and, except following a Non-Asset Trigger Event,
the amount of Mortgages Trustee Principal Receipts to be distributed to
Funding in respect of that Issuer on that Distribution Date may not exceed
the amount determined under paragraph (b)(ii) above.
(2) If the Notes of any Issuer have become immediately due and payable as a
result of the service of a Note Enforcement Notice or if the Intercompany
Loan of any Issuer (and the other Intercompany Loans of any other Issuers)
have become immediately due and payable as a result of the service of an
Intercompany Loan Enforcement Notice, then for the purpose of calculating
the amount in respect of that Issuer under paragraph (b)(ii) above, that
amount may be reduced to the extent of any remaining amounts standing to
the credit of the Issuer Reserve Ledger and/or the Issuer Liquidity Reserve
Ledger (if any) for that Issuer which are to be utilised on the immediately
succeeding Payment Date to repay principal on that Issuer's Intercompany
Loan, but only to the extent that those amounts would not otherwise be
payable on that Intercompany Loan on that Payment Date.
(3) The amount of Mortgages Trustee Principal Receipts payable to Funding in
respect of each Issuer on a Distribution Date will be reduced in proportion
to the aggregate of the Issuer Available Revenue Receipts of that Issuer
which are to be applied on the immediately succeeding Payment Date in
reduction of deficiencies recorded on the Issuer Principal Deficiency
Ledger of that Issuer, but only to the extent that the Issuer Available
Revenue Receipts which are to be so applied on that Payment Date would not
otherwise be payable as principal on the relevant Notes on that Payment
Date.
(4) For the purpose of determining the Mortgages Trustee Principal Receipts to
be distributed to Funding in respect of the amount due on the Intercompany
Loan of any Issuer under (b) and (c) above, the Outstanding Principal
Balance of that Intercompany Loan shall be deemed to be reduced by the
amount of:
(a) any deficiency recorded on the Issuer Principal Deficiency Ledger of
that Issuer as at that Distribution Date, but only to the extent that
such deficiency has arisen under a result of (i) Losses on the
Mortgage Loans allocated by Funding to that Issuer and/or (ii) the
application of Funding Available Principal Receipts to fund the Issuer
Liquidity Reserve Fund of that Issuer but not as a result of any other
principal deficiency of that Issuer; and
(b) the Outstanding Principal Balance as at such Distribution Date of any
Special Repayment Notes issued by that Issuer.
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(5) Funding will not be entitled to receive and the Cash Manager shall procure
that Funding does not receive any amount of Mortgages Trustee Principal
Receipts from the Mortgages Trustee on a Distribution Date which is not
required by Funding to repay principal falling due on any Intercompany Loan
on the immediately succeeding Payment Date in order to fund payments of
principal falling due on any Notes issued by any Issuer on that Payment
Date.
(6) The Mortgages Trustee will not distribute any Overpayment (other than a
Capital Payment) in respect of any Non-Flexible Mortgage Loan until the
first Distribution Date following December 31 of the year in which such
Overpayment is received; provided that if a Borrower has made an
Underpayment of principal in respect of such Non-Flexible Mortgage Loan
following the Overpayment then the Mortgages Trustee will distribute
principal in an amount up to the amount of such Underpayment (but not
exceeding the amount of the Overpayment previously made) on the immediately
succeeding Distribution Date.
(7) If an Assignment Date or a Funding Contribution Date has occurred during
the Trust Calculation Period immediately preceding a Distribution Date,
then the Cash Manager shall use the Weighted Average Funding Share
Percentage (instead of the Current Funding Share Percentage) as calculated
pursuant to Clause 8.3(b) above in determining the amount of Mortgages
Trustee Principal Receipts to be distributed to Funding in respect of each
Issuer pursuant to Clause 11.1(b)(ii) above.
(8) On a Seller Share Event Distribution Date, the Cash Manager shall not
distribute the remaining Mortgages Trustee Principal Receipts to the Seller
and shall deposit all Mortgages Trustee Retained Principal Receipts in the
Mortgages Trustee GIC Account and make a corresponding credit to the
Mortgages Trustee Principal Ledger.
11.2 Distribution of Mortgages Trustee Principal Receipts on or after the
occurrence of an Asset Trigger Event: On or after the occurrence of an
Asset Trigger Event, the Cash Manager (at the direction of the Mortgages
Trustee acting on behalf of the Beneficiaries at their direction and with
their consent which is hereby given) shall, on each Distribution Date
(including, if applicable, any Distribution Date on which an Asset Trigger
Event occurs), allocate and distribute all Mortgages Trustee Principal
Receipts as follows:
(a) if the immediately preceding Distribution Date was a Seller Share
Event Distribution Date, all of the Mortgages Trustee Retained
Principal Receipts to Funding; and then
(b) between Funding and the Seller, in no order of priority between them
and pro rata according to the Funding Share Percentage of the Trust
Property and the Seller Share
32
Percentage of the Trust Property, respectively, until the Funding
Share of the Trust Property is zero (and, for the avoidance of doubt,
such payments may reduce the Seller Share to an amount less than the
Minimum Seller Share),
PROVIDED THAT if an Assignment Date or a Funding Contribution Date has
occurred in the Trust Calculation Period immediately preceding any such
Distribution Date, the Cash Manager will apply all Mortgages Trustee
Principal Receipts after (a) above between Funding and the Seller pro rata
according to the Weighted Average Funding Share Percentage (as calculated
pursuant to Clause 8.3 above) and Weighted Average Seller Share Percentage
(as calculated pursuant to Clause 8.7 above) for such Distribution Date
until the Funding Share of the Trust Property is zero.
11.3 Distribution of Principal Receipts on or after the occurrence of a
Non-Asset Trigger Event: On or after the occurrence of a Non-Asset Trigger
Event and until the occurrence of an Asset Trigger Event, the Cash Manager
(at the direction of the Mortgages Trustee acting on behalf of the
Beneficiaries at their direction and with their consent which is hereby
given) shall, on each Distribution Date (including, if applicable, any
Distribution Date on which a Non-Asset Trigger Event occurs), apply all
Mortgages Trustee Principal Receipts to Funding until the Funding Share of
the Trust Property has been reduced to zero and shall thereafter, on each
Distribution Date, apply all Mortgages Trustee Principal Receipts to the
Seller.
12. Allocation of Losses
12.1 Subject as provided otherwise herein (including Clause 8.4 (Adjustments to
Trust Property) of this Deed), all Losses sustained on the Mortgage Loans
(other than Personal Secured Loans) during a Trust Calculation Period shall
be applied in reducing pro rata both the Funding Share and the Seller Share
of the Trust Property on the Distribution Date immediately succeeding such
Trust Calculation Period by multiplying the Losses sustained in such
relevant Trust Calculation Period by the Current Funding Share Percentage
(as calculated on the Distribution Date immediately preceding such Trust
Calculation Period), until the Funding Share of the Trust Property is zero,
PROVIDED THAT, if during the Trust Calculation Period immediately preceding
a Distribution Date the Seller had sold and assigned New Mortgage Loans to
the Mortgages Trustee, or if Funding paid a Further Contribution to the
Mortgages Trustee to increase the Funding Share of the Trust Property such
Losses shall be multiplied by the Weighted Average Funding Share Percentage
(as calculated on such Distribution Date pursuant to Clause 8.3(c) above)
rather than the Current Funding Share Percentage. The remainder of such
Losses shall be allocated to the Seller.
33
12.2 All losses sustained during a Trust Calculation Period on Personal Secured
Loans forming part of the Trust Property shall be applied to reduce the
Seller Share of the Trust Property (including, for the avoidance of doubt,
that portion of the Seller Share which represents the Minimum Seller Share)
on the Distribution Date immediately succeeding such Trust Calculation
Period until the Seller Share is zero and thereafter shall be applied to
reduce the Funding Share of the Trust Property.
13. Overpayments
13.1 Non-Flexible Mortgage Loans: The Mortgages Trustee shall not distribute to
the Beneficiaries any Overpayment in respect of any Non-Flexible Mortgage
Loan which does not constitute a Capital Payment until the first
Distribution Date following 31st December of the year in which such
Overpayment is received, save to the extent that any such Overpayment by a
Borrower is applied in reduction of an Underpayment by such Borrower in
respect of such Mortgage Loan prior to such date. Any such Overpayment
shall be retained in the Mortgages Trustee GIC Account and the Cash Manager
will maintain a separate ledger to record its receipt and subsequent
payment from time to time. Where any such Overpayment has been made in
error the Cash Manager and/or the Administrator will be authorised to
refund the amount of such Overpayment to the relevant Borrower at any time
prior to 31st December of the year in which such Overpayment was made.
13.2 Flexible Mortgage Loans: Overpayments in respect of any Flexible Mortgage
Loan (including the amount of any Together Connections Benefit applied to
the related Together Connections Mortgage Loans or any Connections Benefit
applied to the related Connections Mortgage Loans) will not be retained in
the Mortgages Trustee GIC Account but will be distributed to the
Beneficiaries on the immediately succeeding Distribution Date as Principal
Receipts.
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14. Arrears
The aggregate Current Balance of the Mortgage Loans in the Mortgages Trust
will be increased at any time by the amount in which the Mortgage Loans
that have been sold and assigned to the Mortgages Trust are in arrears and
those arrears have been capitalised. Such increase shall be allocated to
the Beneficiaries at any time in proportion to their respective percentage
shares in the Trust Property as determined in respect of the Trust
Calculation Period or Interim Calculation Period, as the case may be, in
which the arrears occur.
15. Ledgers
The Mortgages Trustee shall maintain, or shall procure that the Cash
Manager shall maintain, the following Mortgages Trustee Ledgers:
(a) the Principal Ledger, which shall record (i) all receipts of Principal
Receipts and distribution of the same to Funding and the Seller and
(ii) any Mortgages Trustee Retained Principal Receipts;
(b) the Revenue Ledger, which shall record all receipts of Revenue
Receipts and distribution of the same in accordance with this Deed;
(c) the Losses Ledger, which shall record Losses in relation to the
Mortgage Loans;
(d) the Funding Share/Seller Share Ledger which shall record the Funding
Share, the Seller Share of the Trust Property, the Funding Share
Percentage and the Seller Share Percentage;
(e) the Overpayments Ledger; which shall be divided into sub ledgers to
record (i) Overpayments on Non-Flexible Mortgage Loans received into
and paid out of the Mortgages Trustee GIC Account from time to time
and (ii) Overpayments on Flexible Mortgage Loans;
(f) the Non-Flexible Underpayments Ledger; which shall record
Underpayments on Non-Flexible Mortgage Loans from time to time;
(g) the Re-Draw Ledger, which shall be divided into sub ledgers to record
(i) Cash Re-Draws made in respect of Flexible Mortgage Loans and (ii)
Non-Cash Re-Draws made in respect of Flexible Mortgage Loans;
35
(h) the Contributions Ledger, which will be divided into sub ledgers to
record (i) the making by Funding of Contributions to the Mortgages
Trust, (ii) the making by the Seller of Contributions to the Mortgages
Trust and the application of such Contributions by the Mortgages
Trustee in payment to the Seller of (a) amounts of Initial Purchase
Price for the sale of any New Mortgage Portfolio which is acquired by
the Mortgages Trustee from the Seller under the provisions of the
Mortgage Sale Agreement or (b) amounts of Deferred Purchase Price in
accordance with the Mortgage Sale Agreement or (c) any Initial
Consideration in accordance with this Deed; and
(i) the Further Draw Ledger, which shall record all Further Draws in
relation to Personal Secured Loans.
16. Fees and Expenses of the Mortgages Trustee
16.1 Remuneration: The Mortgages Trustee shall be entitled to charge and be
remunerated for the work undertaken by it as trustee of the trusts created
by this Deed. The remuneration shall be on such terms (if any) as the
Mortgages Trustee may from time to time agree with the Beneficiaries in
writing.
16.2 Expenses and Liabilities: Each Beneficiary shall indemnify the Mortgages
Trustee from time to time with such regularity as is reasonably agreed
between the parties, in respect of the Funding Share and the Seller Share,
respectively, of the documentable costs, expenses and/or liabilities
directly and properly incurred by the Mortgages Trustee in performing its
obligations hereunder or otherwise in acting as trustee in accordance with
the terms of this Deed and the other Transaction Documents to which the
Mortgages Trustee is a party inclusive (if applicable) of any amounts in
respect of Irrecoverable VAT incurred in respect of such costs and
expenses.
17. Directions from Beneficiaries
17.1 Administration Agreement and Cash Management Agreement: On the Initial
Closing Date the Mortgages Trustee shall enter into the Administration
Agreement and the Cash Management Agreement.
17.2 Directions from Beneficiaries: Subject to Clause 17.3 (No Breach) below,
the Mortgages Trustee covenants with the Beneficiaries that the Mortgages
Trustee shall take all necessary steps and do everything which both Funding
and the Seller (acting together) may reasonably
36
request or direct it to do in order to give effect to the terms of this
Deed or the other Transaction Documents to which the Mortgages Trustee is a
party; provided that at any time after the Funding Share has been reduced
to zero the Mortgages Trustee shall not be required to act at the direction
of both Funding and the Seller (acting together) and shall instead act in
accordance with any direction given solely by the Seller.
17.3 No breach: Each of Funding and the Seller covenant with each other and with
the Mortgage Trustee that neither shall direct or request the Mortgages
Trustee to do any act or thing which breaches the terms of, or is otherwise
expressly dealt with (such that the Mortgages Trustee has no discretion)
under any of the Transaction Documents.
17.4 No requirement to act: The Mortgages Trustee will not be bound and shall
have no power to take any proceedings, actions or steps under or in
connection with any of this Deed or the other Transaction Documents to
which it is a party unless:
(a) it shall have been directed to do so by the Beneficiaries or it is
required to do so under any express provision of this Deed or the
other Transaction Documents (but subject to Clause 17.2 (Directions
from Beneficiaries) in respect of conflict of directions); and
(b) it shall have been indemnified to its satisfaction against all
liabilities, proceedings, claims and demands to which it may be or
become liable and all costs, charges and expenses which may be
incurred by it in connection therewith and the terms of such indemnity
may include the provision of a fighting fund, non-recourse loan or
other similar arrangement.
17.5 Covenant of the Mortgages Trustee: Subject to Clause 17.2 (Directions from
Beneficiaries) the Mortgages Trustee covenants with each of the Seller and
Funding to exercise all of its rights arising under or in respect of the
Trust Property (including without limitation any rights of enforcement) for
the benefit of and on behalf of the Beneficiaries.
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18. Early Termination of the Mortgages Trust
Prior to its termination in accordance with Clause 26 (Termination),
provided that all amounts due from Funding to the Funding Secured Creditors
have been repaid in full and the Funding Share of the Trust Property has
been reduced to zero, the Mortgages Trust constituted by this Deed may be
terminated at the option of the Seller, following a request in writing by
the Seller to the Mortgages Trustee (which shall be copied to Funding and
the Cash Manager) at any time on or after the date on which all of the
Intercompany Loans have been repaid in full or there is no further claim
under any Intercompany Loan or such other date as may be agreed in writing
between the Mortgages Trustee, Funding and the Seller.
19. Audit of Mortgage Loans constituting the Trust Property
If the long term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller fall below A3 by Xxxxx'x then, if required by
Xxxxx'x, the Beneficiaries shall appoint a firm of independent auditors
(approved by the Rating Agencies) to determine whether the Mortgage Loans
and their Related Security (or any part of them) constituting the Trust
Property complied with the representations and warranties set out in
Schedule 1 (Representations and Warranties) of the Mortgage Sale Agreement
as at the date such Mortgage Loans were sold and assigned to the Mortgages
Trustee. The costs of such independent auditors shall be borne by the
Beneficiaries pro rata according to their respective current percentage
shares in the Trust Property.
20. Transfers
20.1 Funding shall not assign: Subject to the right of Funding to assign by way
of security its right, title, benefit and interest in the Trust Property
and/or under this Deed to the Security Trustee under the Funding Deed of
Charge and subject to the right of the Security Trustee or a Receiver to
sell the Funding Share of the Trust Property and/or such right and interest
under this Deed following the service of an Intercompany Loan Enforcement
Notice (which right is hereby conferred), Funding covenants with the Seller
that it shall not, and shall not purport to, sell, assign, transfer,
convey, charge, declare a trust over, create any beneficial interest in, or
otherwise dispose of the Funding Share in the Trust Property, or any of
Funding's rights, title, interest or benefit in any of the Mortgage
Portfolio or the Trust Property.
20.2 Seller shall not assign: The Seller covenants with Funding that it shall
not, and shall not purport to, sell, assign, transfer, convey, charge,
declare a trust over, create any beneficial interest in, or otherwise
dispose of the Seller Share in the Trust Property or any of the Seller's
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rights, title, interest or benefit in the Trust Property, other than
pursuant to the Transaction Documents.
21. Representations and Covenants
21.1 Representations: On the date hereof, each of the parties to this Deed makes
the representations and warranties set out in Schedule 1 (Representation
and Warranties) to this Deed to each of the other parties hereto.
21.2 Covenants of the Mortgages Trustee: Save with the prior written consent of
or at the direction of the Beneficiaries or as provided in or envisaged by
this Deed and/or the other Transaction Documents, the Mortgages Trustee
shall not, so long as it is acting as Mortgages Trustee hereunder:
(a) Negative Pledge: create or permit to subsist any mortgage, standard
security, pledge, lien, charge or other security interest whatsoever
(unless arising by operation of law), upon the whole or any part of
its assets (including any uncalled capital) or its undertakings
(present or future) or (to the extent that it is within the control of
the Mortgages Trustee) upon the whole or any part of the Trust
Property;
(b) Disposal: transfer, sell, lend, part with or otherwise dispose of, or
deal with, or grant any option or present or future right to acquire
any of its assets or undertakings or (to the extent that it is within
the control of the Mortgages Trustee) the Trust Property or any
interest, estate, right, title or benefit therein or thereto or agree
or attempt or purport to do so;
(c) Equitable Interest: knowingly permit any person other than the
Beneficiaries to have any equitable or beneficial interest in any of
its assets or undertakings or (to the extent that it is within the
control of the Mortgages Trustee) the Trust Property or any interest,
estate, right, title or benefit therein;
(d) Bank Accounts: have an interest in any bank account, other than as set
out in the Transaction Documents.
(e) Restrictions on Activities: carry on any business other than as
described in this Deed and the Transaction Documents;
(f) Borrowings: incur any indebtedness in respect of borrowed money
whatsoever or give any guarantee or indemnity in respect of any such
indebtedness;
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(g) Merger: consolidate or merge with any other person or convey or
transfer its properties or assets substantially or as an entirety to
any other person;
(h) Premises or Employees: have any premises or employees or subsidiaries;
or
(i) Further shares: issue any further shares;
(j) United States activities: engage in any activities in the United
States (directly or through agents) or derive any income from United
States sources as determined under United States income tax principles
or hold any property if doing so would cause it to be engaged or
deemed to be engaged in a trade or business within the United States
as determined under United States tax principles;
(k) Conduct of affairs: take any management decisions or direct the
conduct of its affairs in any Member State of the European Union,
including holding any board meetings in any Member State of the
European Union.
22. Power to Delegate
22.1 Power to delegate: Subject to Clause 22.2 (No further appointments), the
Mortgages Trustee may (notwithstanding any rule of law or equity to the
contrary) delegate (revocably or irrevocably and for a limited or unlimited
period of time) the performance of all or any of its obligations and the
exercise of all or any of its powers under this Deed or imposed or
conferred on it by law or otherwise to any person or body of persons
fluctuating in number selected by it and any such delegation may be by
power of attorney or in such other manner as the Mortgages Trustee may
think fit and may be made upon such terms and conditions (including the
power to sub-delegate) as the Mortgages Trustee may think fit.
22.2 No further appointments: Notwithstanding the provisions of Clause 22.1
(Power to delegate), the Mortgages Trustee shall not appoint any agent,
attorney or other delegate having power to act in respect of the Trust
Property unless it is directed in writing to do so by the Beneficiaries.
The appointment of any agent, attorney or other delegate hereunder above
shall terminate immediately upon the occurrence of a Trigger Event.
23. Powers of Investment
The Mortgages Trustee may invest, and may appoint the Cash Manager to
invest on its behalf, any amounts standing to the credit of the Mortgages
Trustee Transaction Account in Authorised Investments. Save as expressly
provided in this Deed, the Mortgages Trustee
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Guaranteed Investment Contract and the Bank Account Agreement, the
Mortgages Trustee shall have no further or other powers of investment with
respect to the Trust Property and (to the extent permitted by applicable
law) the Trustee Xxx 0000 shall not nor shall any other provision relating
to trustee powers of investment implied by statute or general law shall
apply to the Mortgages Trust.
24. Other Provisions regarding the Mortgages Trustee
24.1 No action to impair Trust Property: Except for actions expressly authorised
by this Deed, the Mortgages Trustee shall take no action reasonably likely
to impair the interests of the Beneficiaries in any Trust Property now
existing or hereafter created or to impair the value of any Mortgage Loan
or its Related Security subject to the Mortgages Trust.
24.2 Litigation: The Mortgages Trustee must not prosecute or defend any legal or
other proceedings anywhere in the world (at the cost of the Trust Property)
unless it obtains legal or other advice that it is in the interests of the
Beneficiaries to do so.
24.3 No Implied Duties: The duties and obligations of the Mortgages Trustee
under the Mortgages Trust shall be determined solely by the express
provisions of this Deed (but without prejudice to the duties and
obligations of the Mortgages Trustee under any of the other Transaction
Documents). The Mortgages Trustee shall not be liable under this Deed
except for the performance of such duties and obligations as shall be
specifically set forth in this Deed. No implied covenants or obligations
shall be read into this Deed against the Mortgages Trustee, and the
permissible right of the Mortgages Trustee to do things set out in this
Deed shall not be construed as a duty.
24.4 No Liability: Neither the Mortgages Trustee, Funding (in its capacity as a
Beneficiary hereunder) nor the Seller (in its capacity as a Beneficiary
hereunder) shall be liable to each other, in the absence of wilful default,
gross negligence or breach of the terms of this Deed, in respect of any
loss or damage which arises out of the exercise or attempted or purported
exercise or failure to exercise any of their respective powers.
24.5 Reliance on Certificates: The Mortgages Trustee may rely on and shall be
protected in acting on, or in refraining from acting in accordance with,
any resolution, officer's certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented to it pursuant to the
Transaction Documents by the proper party or parties.
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24.6 Reliance on Third Parties: The Mortgages Trustee may, in relation to these
presents, act on the opinion or advice of or a certificate or any
information obtained from any lawyer, banker, valuer, broker, accountant,
financial adviser, securities dealer, merchant bank, computer consultant or
other expert in the United Kingdom or elsewhere and shall not, provided
that it shall not have acted fraudulently or in breach of any of the
provisions of the Transaction Documents, be responsible for any loss
occasioned by so acting. Any such opinion, advice, certificate or
information may be sent or obtained by letter, telemessage, telex, cable or
facsimile device and the Mortgages Trustee shall not be liable for acting
on any opinion, advice, certificate or information purporting to be so
conveyed although the same shall contain some error or shall not be
authentic, provided that such error or lack of authenticity shall not be
manifest.
24.7 MIG Policies: The Mortgages Trustee is not required to maintain any MIG
Policy with the then-current insurer and may contract for mortgage
indemnity guarantee protection from any insurer then providing MIG
insurance policies, subject to prior agreement with the Rating Agencies and
confirmation that the then-current ratings by the Rating Agencies (or any
of them) of the Notes issued by any Issuer would not be adversely affected.
25. No retirement of Mortgages Trustee
25.1 No Retirement: The Mortgages Trustee shall not, and shall not purport to,
retire as the trustee of the Mortgages Trust or appoint any additional
trustee of the Mortgages Trust and shall have no power to retire or appoint
any additional trustee under the Trustee Xxx 0000 or otherwise.
25.2 No Replacement: Neither the Seller nor Funding shall at any time remove or
purport to remove and/or replace the Mortgages Trustee as the trustee of
the Mortgages Trust.
25.3 No Termination: Prior to the payment by Funding of all amounts owing under
the Intercompany Loan Agreements and under the Transaction Documents,
neither the Seller nor Funding shall at any time, except in accordance with
the provisions of Clause 18 (Early Termination of the Mortgages Trust) and
Clause 26 (Termination), terminate or purport to terminate the Mortgages
Trust and, in particular, but without prejudice to the generality of the
foregoing, the Seller and Funding shall not in reliance on their absolute
beneficial interests in the Trust Property call for the transfer to them or
vesting in them of the legal estate in all or any part of the Trust
Property.
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26. Termination
Subject to Clause 18 (Early Termination of the Mortgages Trust), the
Mortgages Trust hereby constituted shall terminate upon the date upon which
the Trust Property is zero.
27. Further Assurances
The parties agree that they will co-operate fully to do all such further
acts and things and execute any further documents as may be necessary or
desirable to give full effect to the arrangements contemplated by this
Deed.
28. No Partnership or Agency
Nothing in this Deed shall be taken to constitute or create a partnership
between any of the parties to this Deed or to make or appoint the Seller
the agent of Funding (or vice versa).
29. Calculations
In the absence of manifest error, any determination or calculation by or on
behalf of the Mortgages Trustee in connection with the provisions of this
Deed shall be deemed to be conclusive.
30. Confidentiality
30.1 General Obligation of Confidentiality: Unless otherwise required by
applicable law, and subject to Clause 30.2 (Exceptions) below, each of the
parties agrees to maintain the confidentiality of this Deed in its
communications with third parties and otherwise. None of the parties shall
disclose to any person any information relating to the business, finances
or other matters of a confidential nature of or relating to any other party
to this Deed or any of the Transaction Documents which it may have obtained
as a result of having entered into this Deed or otherwise.
30.2 Exceptions: The provisions of Clause 30.1 (General Obligation of
Confidentiality) above shall not apply:
(a) to the disclosure of any information to any person who is a party to
any of the Transaction Documents as expressly permitted by the
Transaction Documents;
(b) to the disclosure of any information which is or becomes public
knowledge otherwise than as a result of the wrongful conduct of the
recipient;
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(c) to the extent that the recipient is required to disclose the same
pursuant to any law or order of any court or pursuant to any direction
or requirement (whether or not having the force of law) of any central
bank or any governmental or other regulatory or Taxation authority;
(d) to the disclosure of any information to professional advisers who
receive the same under a duty of confidentiality;
(e) to the disclosure of any information with the consent of the parties
hereto;
(f) to the disclosure to the Rating Agencies or any of them of such
information as may be requested by any of them for the purposes of
setting or reviewing the rating assigned to the Notes (or any of
them), provided that no information which would disclose the identity
of a Borrower shall be disclosed to the Rating Agencies or any of
them;
(g) to the disclosure of any information disclosed to a prospective
assignee of Funding (provided that it is disclosed on the basis that
the recipient will hold it confidential); or
(h) to any disclosure for the purposes of collecting in or enforcing the
Trust Property or any of it.
31. Perpetuity Period
The perpetuity period for the purposes of this Mortgages Trust Deed shall
be the period of 80 years commencing on the date hereof.
32. Non Petition Covenant; Limited Recourse
32.1 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.
32.2 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 Deed under this Deed not
being an amount payable out of the Trust Property in accordance with
the terms of this Deed shall only be payable to the
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extent that on that date the Mortgages Trustee has sufficient funds to pay
such amount out of fees paid to it under this 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 Deed or any other
Transaction Document, no sum due or owing to any party to this Deed
from or by Funding under this Deed 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 Deed
against Funding otherwise than in accordance with the Funding Deed of
Charge.
32.3 Corporate Obligations: To the extent permitted by law, no recourse under
any obligation, covenant, or agreement of any person contained in this Deed
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 Deed 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 Deed,
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 Deed.
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33. Amendments and Waiver
33.1 Entire Agreement: This Deed sets out the entire agreement and understanding
between the parties with respect to the subject matter of this Deed
superseding all prior oral or written understandings other than the other
Transaction Documents.
33.2 Amendments and Waiver: No amendment or waiver of any provision of this Deed
nor consent to any departure by any of the parties therefrom shall in any
event be effective unless the same shall be in writing and signed by each
of the parties 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.
33.3 Rights cumulative: The respective rights of each of the parties to this
Deed 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 Deed are cumulative and not exclusive of any remedies
provided by law.
34. Notices
Any notices or other communication or document to be given or delivered
pursuant to this Deed 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 Seller, to Northern Rock plc, Xxxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX (facsimile number 0191 213 2203)
for the attention of the Group Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance Trustees
Limited, 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands (facsimile number 01534-609333) for the attention of the
Company Secretary (with a copy to the Seller in accordance with (a)
above);
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(c) in the case of Funding, to Granite Finance Funding Limited 00 Xxxx
Xxxx, Xxxxxxx, XX0 0XX (facsimile number 020 8409 8911) for the
attention of the Company Secretary (with a copy to the Seller in
accordance with (a) above);
(d) in the case of the Security Trustee, to The Bank of New York, 00xx
Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX (facsimile number 020 7964
6399) for the attention of the Global Structured Finance (Corporate
Trust);
(e) in the case of the Fitch Ratings Ltd, to Fitch Ratings Ltd, Xxxxx
Xxxxx, 0 Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number 020 7417
6262) for the attention of European Structured Finance Surveillance;
(f) in the case of Moody's, to Moody's, 1st Floor, 0 Xxxxxxx Xxxxx,
Xxxxxxx Xxxx, Xxxxxx XX0X 0XX (facsimile number 020 7772 5400) for the
attention of Head of Monitoring Group, Structured Finance (with a copy
to the Seller in accordance with (a) above);
(g) in the case of Standard & Poor's, to Standard & Poor's, 00 Xxxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxx X00 0XX (facsimile number 020 7826 3598)
for the attention of Structured Finance Surveillance Group (with a
copy to the Seller in accordance with (a) above),
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party to
the others by fifteen days prior written notice in accordance with the
provisions of this Clause 34.
35. Third Party Rights
A person who is not a party to this Deed 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.
36. Execution in Counterparts; Severability
36.1 Counterparts: This Deed 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.
36.2 Severability: Where any provision in or obligation under this Deed shall be
invalid, illegal or
47
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations under this Deed,
or of such provision or obligation in any other jurisdiction, shall not be
affected or impaired thereby.
37. Governing Law and Submission to Jurisdiction
37.1 Governing Law: This Deed is governed by, and shall be construed in
accordance with, English law.
37.2 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 Deed and, for such purposes, irrevocably
submits to the jurisdiction of such courts.
37.3 Process Agent: The Mortgages Trustee irrevocably and unconditionally
appoints Mourant & Co. Capital (SPV) Limited at 00 Xxxx Xxxx, Xxxxxxx XX0
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.
37.4 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.
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
1. Status: It is duly incorporated 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) conflict with any document which is binding upon it or any of its
assets;
(b) conflict with its constitutional documents; or
(c) 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.
49
