Exhibit 4.2
EXECUTION VERSION
Dated 19 January, 2005
NORTHERN ROCK PLC
as Seller, Cash Manager and a Beneficiary
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
as Funding and a Beneficiary
- and -
GRANITE FINANCE FUNDING 2 LIMITED
as Funding 2 and a Beneficiary
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TWELFTH AMENDED
MORTGAGES TRUST DEED
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SIDLEY AUSTIN
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SIDLEY |
CONTENTS
1. Definitions and Construction........................................................................2
2. Creation of Mortgages Trust.........................................................................2
3. Conditions Precedent................................................................................4
4. Consideration.......................................................................................5
5. Increasing and Decreasing the Seller Share of the Trust Property...................................10
6. Increasing the Funding Share and the Funding 2 Share of the Trust Property.........................11
7. Initial Funding Share, Initial Seller Share and Initial Funding 2 Share............................14
8. Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller Share Percentage.....15
9. Minimum Seller Share...............................................................................29
10. Distribution of Revenue Receipts...................................................................30
11. Distribution of Principal Receipts.................................................................33
12. Allocation of Losses...............................................................................38
13. Overpayments.......................................................................................39
14. Arrears............................................................................................39
15. Ledgers............................................................................................39
16. Fees and Expenses of the Mortgages Trustee.........................................................40
17. Beneficiary Directions.............................................................................41
18. Early Termination of the Mortgages Trust...........................................................43
19. Audit of Mortgage Loans Constituting the Trust Property............................................43
20. Transfers..........................................................................................43
21. Representations and Covenants......................................................................44
22. Power to Delegate..................................................................................45
23. Power of Investment................................................................................45
24. Other Provisions Regarding the Mortgages Trustee...................................................46
25. No Retirement of Mortgages Trustee.................................................................47
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26. Termination........................................................................................47
27. Further Assurances.................................................................................48
28. No Partnership or Agency...........................................................................48
29. Calculations.......................................................................................48
30. Confidentiality....................................................................................48
31. Non Petition Covenant; Limited Recourse............................................................49
32. Amendments and Waiver..............................................................................50
33. Notices............................................................................................51
34. Third Party Rights.................................................................................52
35. Execution in Counterparts; severability............................................................52
36. Governing Law and Submission to Jurisdiction.......................................................52
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES...................................................................54
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THIS MORTGAGES TRUST DEED WAS MADE ON 26 MARCH, 2001 AND AMENDED AND RESTATED
PURSUANT TO THE DEEDS OF AMENDMENT AND RESTATEMENT DATED 23 JULY, 2001, 28
SEPTEMBER, 2001, 20 MARCH, 2002, 23 SEPTEMBER, 2002, 27 JANUARY, 2003, 21 MAY,
2003, 24 SEPTEMBER, 2003, 26 JANUARY, 2004, 26 MAY, 2004, 19 JANUARY, 2005, 19
JANUARY, 2007 AND 17 MAY, 2007 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, in its capacity as Cash
Manager and in its capacity as a Beneficiary;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0
0XX, Channel Islands in its capacity as Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out
of its office established in England (registered overseas company
number FC022999 and branch number BR005916) at 00 Xxxx Xxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX, in its capacity as a Beneficiary; and
(4) GRANITE FINANCE FUNDING 2 LIMITED (registered number 5249387), a
private limited company incorporated under the laws of England and
Wales, whose registered office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx,
Xxxxxx XX0X 0XX, in its capacity as a Beneficiary.
WHEREAS:
(A) The Mortgages Trustee wishes to declare the following trusts in
respect of the Trust Property (being on 26 March, 2001, the sum of
(GBP)100 which monies have been received by and 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, 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 (as the same
have been and may be amended, varied or supplemented from time to
time), 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 Programme Master Definitions Schedule signed
for identification purposes by Sidley Xxxxxx Xxxxx & Xxxx and Xxxxx &
Overy LLP on 19 January, 2005 (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 and Decreasing the
Seller Share of the Trust Property) and/or Clause 6
(Increasing the Funding Share and the Funding 2 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 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 also form part of the
Trust Property.
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(C) Amounts on deposit (and interest earned on such amounts)
from time to time in the Mortgages Trustee Bank Accounts
will also form part of the Trust Property.
(D) If the Seller subsequently decides not to repurchase 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 also 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 Mortgages 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.
2.6 Trust Property/Declaration of Trust
Subject to Clause 3 (Conditions Precedent), the Mortgages Trustee
shall hold the Trust Property as to both capital and income on trust
absolutely for Funding, Funding 2 and for the Seller 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). For the
purposes of Clause 2.1 (Initial Trust Property) to Clause 2.6 (Trust
Property/Declaration of Trust) (inclusive), "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
purchased or repurchased (as applicable) by the Seller pursuant to
the Mortgage Sale Agreement) and all Other Trust Property referred to
under Clause 2.4 (Other Trust Property) 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.
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2.7 Additional Trust Property/Declaration of Trust
With effect on and from the Funding 2 Programme Date, the Mortgages
Trustee hereby declares itself as trustee of all rights, title,
interest and benefit of all property and assets held by it at any
time (to the extent that such rights, title, interest and benefit in
such property and assets do not form part of the Initial Trust
Property, the Closing Trust Property, the New Trust Property and/or
any Trust Property referred to in Clause 2.4 (Other Trust Property))
which rights, title, interest and benefit (the "Additional Trust
Property") shall be held on trust by the Mortgages Trustee absolutely
as to both capital and income for the benefit of the Seller, Funding
and Funding 2 as tenants in common upon, with and subject to all of
the trusts, powers and provisions of this Deed (such that each
Beneficiary shall have an individual beneficial interest in the
Additional Trust Property).
2.8 Funding 2 Contributions
The consideration in the form of Contributions provided by Funding 2
to the Mortgages Trustee subject to and in accordance with Clause 4
(Consideration) and/or Clause 6 (Increasing the Funding Share and the
Funding 2 Share of the Trust Property) to be applied by the Mortgages
Trustee as set out in this Deed shall, until such Contributions form
part of the Trust Property referred to in Clause 2.4 (Other Trust
Property), form part of Additional Trust Property.
3. CONDITIONS PRECEDENT
3.1 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 on the Initial Closing Date;
(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.
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3.2 New Trust Property
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, any New Trust Property sold and
assigned to the Mortgages Trustee, shall be held by the Mortgages
Trustee on the Mortgages Trust .
3.3 Funding 2 Share
The requirement for the Mortgages Trustee to hold the Trust Property
on trust for Funding 2 shall be subject to and conditional upon the
acquisition by Funding 2, by way of assignment, from the Seller of a
portion of the Seller's beneficial interest in the Mortgages Trust in
accordance with the terms of the Seller (Mortgages Trust) Assignment
Agreement.
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, the Seller
and, upon the acquisition by Funding 2, by way of
assignment, from the Seller of a portion of the Seller's
beneficial interest in the Mortgages Trust in accordance
with the terms of the Seller (Mortgages Trust) Assignment
Agreement, Funding 2, 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 of the Trust Property:
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(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:
(1) Mortgages Trustee Available Revenue Receipts to which
Funding is entitled on such date in accordance with
paragraph (D)(i) of Clause 10.2 (Distribution of
Mortgages Trustee Available Revenue Receipts); and
(2) the Funding Proportion of the amount of any Early
Repayment Charge Receipts payable by the Mortgages
Trustee to the Seller under the Mortgage Sale
Agreement.
The amounts listed under sub-clauses (B)(1) and (B)(2) are,
together, referred to as the "Funding Relevant
Distribution". The Funding Relevant Distribution and the
Funding 2 Relevant Distribution (as defined in Clause 4.3(A)
below) are calculated as at such Distribution Date, and
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 Funding
Relevant Distribution and the Deferred Contribution payable
by Funding (as calculated pursuant to this sub-clause (B))
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 Funding 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 (in part) 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 Funding Relevant Distribution;
(C) on each date after the Initial Closing Date on which (i) an
amount of the 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 Funding Intercompany
Loan from a Funding Issuer, by paying to the Mortgages
Trustee an Initial 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
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 unless, in either case,
Funding has given notice to each relevant Funding Issuer of
its intention to use the proceeds of a Funding Intercompany
Loan to repay one or more of the Funding Intercompany Loans
from such Funding Issuers, and subject to
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Clause 6 (Increasing the Funding Share and the Funding 2
Share of the Trust Property) below;
(D) on each other date after the Initial Closing Date on which
Funding receives the net proceeds of a Funding Intercompany
Loan from a Funding 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 Special
Distribution payable to the Seller in accordance with Clause
4.4 (Application by Mortgages Trustee) unless Funding has
given notice to each relevant Funding Issuer of its
intention to use the proceeds of a Funding Intercompany Loan
to repay one or more of the Funding Intercompany Loans from
such Funding Issuers subject to Clause 6 (Increasing the
Funding Share and the Funding 2 Share of the Trust Property)
below; and
(E) following the Final Repayment Date of the latest maturing
Funding Intercompany Loan made by any Funding Issuer to
Funding and provided that there are no further claims
outstanding under any Funding Intercompany Loan or on such
earlier date provided that all Funding Intercompany Loans
have either been repaid in full or there are no further
claims outstanding under any Funding Intercompany Loan,
Funding will make a final payment of Deferred Contribution
to the Mortgages Trustee (the "Funding 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 Funding Issuer) after making any payments ranking in
priority thereto, subject to and in accordance with the
relevant Funding Priority of Payments. The Funding Final
Deferred Contribution shall be in an amount equal to (and
from the Funding Final Deferred Contribution the Mortgages
Trustee shall or shall procure that the Cash Manager shall
on its behalf pay) an 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 Consideration provided by Funding 2
Funding 2 in its capacity as a Beneficiary shall provide
consideration to the Mortgages Trustee for the Funding 2 Share of the
Trust Property:
(A) on each Distribution Date, by paying to the Mortgages
Trustee a Deferred Contribution equal to the amount (if any)
of:
(1) Mortgages Trustee Available Revenue Receipts to which
Funding 2 is entitled on such date in accordance with
paragraph (D)(ii) of Clause 10.2 (Distribution of
Mortgages Trustee Available Revenue Receipts); and
(2) the Funding 2 Proportion of the amount of any Early
Repayment Charge Receipts payable by the Mortgages
Trustee to the Seller under the Mortgage Sale
Agreement.
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The amounts listed under sub-clauses (A)(1) and (A)(2) are,
together, referred to as the "Funding 2 Relevant
Distribution". Together with the Funding Relevant
Distribution, the Funding 2 Relevant Distribution shall be
applied in accordance with Clause 4.2(B). The parties to
this Deed agree that on any Distribution Date, the Funding 2
Relevant Distribution and the Deferred Contribution payable
by Funding 2 (as calculated pursuant to this sub-clause (A))
to the Mortgages Trustee shall be set off against each other
such that, as between the Mortgages Trustee and Funding 2,
no amount shall be payable in respect of such Funding 2
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 (in part) 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 2 as the Funding 2 Relevant Distribution;
(B) on each date after the Funding 2 Programme 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 2
receives the net proceeds of a Loan Tranche under the Global
Intercompany Loan, by paying to the Mortgages Trustee an
Initial Contribution in respect of the Funding 2 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 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 unless Funding 2 has given
notice to the Funding 2 Issuer of its intention to use the
proceeds of a Loan Tranche under the Global Intercompany
Loan to repay (in part or in full) one or more of the Loan
Tranches under the Global Intercompany Loan from the Funding
2 Issuer and subject to Clause 6 (Increasing the Funding
Share and the Funding 2 Share of the Trust Property) below;
(C) on each other date after the Funding 2 Programme Date on
which Funding 2 receives the net proceeds of a Loan Tranche
from the Funding 2 Issuer, by paying to the Mortgages
Trustee a Further Contribution in respect of the Funding 2
Share of the Trust Property which shall be equal to (and
from which the Mortgages Trustee shall pay or shall procure
that the Cash Manager on its behalf shall pay):
(1) the Special Distribution payable to the Seller in
accordance with Clause 4.4 (Application by Mortgages
Trustee); and/or
(2) the Special Distribution payable to Funding in
accordance with Clause 4.4 (Application by Mortgages
Trustee),
unless Funding 2 has given notice to the Funding 2 Issuer of
its intention to use the proceeds of a Loan Tranche to repay
(in part or in full) one or more of the Loan Tranches each
relating to a series and class of notes of the Funding 2
Issuer being refinanced and subject to Clause 6 (Increasing
the Funding Share and the Funding 2 Share of the Trust
Property) below.
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(D) following the Final Repayment Date of the latest maturing
Loan Tranche made under the Funding 2 Intercompany Loan
Agreement by the Funding 2 Issuer to Funding 2 and provided
that there are no further claims outstanding in respect of
the Funding 2 Deed of Charge or on such earlier date
provided that all Funding 2 Secured Obligations have either
been repaid in full or there are no further claims
outstanding under the Funding 2 Deed of Charge, Funding 2
will make a final payment of Deferred Contribution to the
Mortgages Trustee (the "Funding 2 Final Deferred
Contribution") in an amount equal to the aggregate amount
standing to the credit of the Funding 2 Bank Accounts after
making any payments ranking in priority thereto, subject to
and in accordance with the relevant Funding 2 Priority of
Payments. The Funding 2 Final Deferred Contribution shall be
in an amount equal to (and from the Funding 2 Final Deferred
Contribution the Mortgages Trustee shall or shall procure
that the Cash Manager shall on its behalf pay) an amount of
Deferred Purchase Price payable by the Mortgages Trustee to
the Seller pursuant to and in accordance with the Mortgage
Sale Agreement.
Funding 2 shall pay or shall procure the payment of the amount of any
Initial Contribution or Further Contribution to be made by it to the
Mortgages Trustee into the Mortgages Trustee Transaction Account.
4.4 Application by Mortgages Trustee
(A) If the Mortgages Trustee receives any Initial Contribution,
Deferred Contribution or the Final Deferred Contribution
from a Funding 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, 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.
(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:
(1) where such Further Contribution is made by Funding 2:
(a) if Funding 2 so elects, in its sole discretion,
pay all or part of such Further Contribution as
a Special Distribution to Funding in accordance
with the terms of this Deed provided that the
amounts of such Special Distribution shall not
exceed the aggregate outstanding principal
balance of all Funding Intercompany Loans, and
(b) if Funding 2 so elects, pay all or part of such
Further Contribution as a Special Distribution
to the Seller in accordance with the terms of
this Deed;
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(2) where such Further Contribution is made by
Funding, pay such funds as a Special
Distribution to the Seller in accordance with
the terms of this Deed; and
(3) where such Further Contribution is made by the
Seller, pay such funds 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
included in the Mortgage Portfolio, the relevant Borrower
requests a Cash Re-draw and the Administrator (on behalf of
the Seller) 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
included in the Mortgage Portfolio 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
included in the Mortgage Portfolio, 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 included in
the Mortgage Portfolio 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 does not purchase any Mortgage Loan
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 included in the Mortgage Portfolio 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.
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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 included in the Mortgage
Portfolio, 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 included in the Mortgage
Portfolio 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 included in the Mortgage
Portfolio 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 included in the
Mortgage Portfolio 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 AND THE FUNDING 2 SHARE OF THE TRUST
PROPERTY
6.1 Conditions precedent to the increase of the Funding Share
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 Funding 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 Funding Intercompany Loan;
(C) the Rating Agencies have confirmed in writing to the
Mortgages Trustee, the Security Trustee, the Funding 2
Security Trustee and each Issuer that the proposed increase
in the Funding Share of the Trust Property would not cause
the then-current ratings by the Rating Agencies (or any of
them) of the existing Notes of any Issuer to be reduced,
withdrawn or qualified;
(D) the New Notes have been issued by a Funding Issuer, the
subscription proceeds received on behalf of such Funding
Issuer and advanced by such Funding Issuer to Funding
pursuant to a Funding 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 6.3 (Completion));
11
(E) if necessary, each Funding Issuer, including any New Funding
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 Mortgage Portfolio 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
Mortgage Portfolio at such time unless the Rating Agencies
have confirmed that the then-current ratings of the Notes of
each Funding Issuer will not be adversely affected;
(G) as of the last day of the immediately preceding Trust
Calculation Period the Xxxxx'x Portfolio Variation Test
Value of the Mortgage Loans in the Mortgage Portfolio on
such date (calculated by applying the Xxxxx'x Portfolio
Variation Test to such Mortgage Loans on such date) does not
exceed the most recently determined Xxxxx'x Portfolio
Variation Test Threshold Value (as calculated in relation to
the Mortgage Loans in the Mortgage Portfolio on the most
recent date on which Xxxxx'x performed a full pool analysis
on the Mortgage Portfolio) plus 0.30 per cent.;
(H) in respect of each Funding Issuer, 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
Funding 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 to Condition 5 of the First Issuer Notes is not
exercised.
6.2 Conditions precedent to the increase of the Funding 2 Share
Subject as provided below, Funding 2 may increase the Funding 2 Share
of the Trust Property, subject to satisfaction of the following
conditions precedent:
(A) no Funding 2 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 Funding 2 Intercompany Loan;
(C) the Rating Agencies have confirmed in writing to the
Mortgages Trustee, the Security Trustee, the Funding 2
Security Trustee and each Funding 2 Issuer that the proposed
increase in the Funding 2 Share of the Trust Property would
not cause the then-current ratings by the Rating Agencies
(or any of them) of the existing Notes of any Issuer to be
reduced, withdrawn or qualified;
(D) the New Notes have been issued by the Funding 2 Issuer, the
subscription proceeds received on behalf of the Funding 2
Issuer and advanced by the Funding 2 Issuer to Funding 2
pursuant to a Funding 2 Intercompany Loan Agreement (which
proceeds Funding 2 will pay to the Mortgages Trustee to
12
increase the Funding 2 Share of the Trust Property on the
relevant date in accordance with Clause 6.3 (Completion));
(E) if necessary, Funding 2 and/or the Funding 2 Issuer have
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 Mortgage Portfolio 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
Mortgage Portfolio at such time unless the Rating Agencies
have confirmed that the then-current ratings of the existing
Notes of the Funding 2 Issuer will not be adversely
affected;
(G) as of the last day of the immediately preceding Trust
Calculation Period the Xxxxx'x Portfolio Variation Test
Value of the Mortgage Loans in the Mortgage Portfolio on
such date (calculated by applying the Xxxxx'x Portfolio
Variation Test to such Mortgage Loans on such date) does not
exceed the most recently determined Xxxxx'x Portfolio
Variation Test Threshold Value (as calculated in relation to
the Mortgage Loans in the Mortgage Portfolio on the most
recent date on which Xxxxx'x performed a full pool analysis
on the Mortgage Portfolio) plus 0.30 per cent.;
(H) in the most recent Monthly Payment Period, no deficiency was
recorded on the Funding 2 Principal Deficiency Ledger,
provided always that Funding 2 shall not be entitled to increase the
Funding 2 Share of the Trust Property after the date falling 12
months after the occurrence of a Step-Up Date (the "twelve-month
date") in respect of any Series and Class of Notes of a Funding 2
Issuer, if the option to redeem such Notes by such twelve-month date
pursuant to the terms and conditions of such Notes is not exercised.
6.3 Completion
Subject to satisfaction of the conditions precedent set out in Clause
6.1 (Conditions precedent to the Increase of the Funding Share) or
Clause 6.2 (Conditions precedent to the Increase of the Funding 2
Share) above, Funding or Funding 2, as applicable, shall pay to the
Mortgages Trustee the consideration for such increase in the Funding
Share or the Funding 2 Share, as applicable, in accordance with
Clause 4 (Consideration) and the Current Funding Share, the Current
Funding Share Percentage, the Current Funding 2 Share and the Current
Funding 2 Share Percentage (as applicable) shall be recalculated in
accordance with Clause 8.2 (Current Funding Share Percentage and
Current Funding 2 Share Percentage) and Clause 8.4 (Current Funding
Share and Current Funding 2 Share).
6.4 Distribution
The parties hereto agree that any Initial Contribution or Further
Contribution received by the Mortgages Trustee from a Funding
Beneficiary in accordance with Clause 4 (Consideration) on any date
shall be allocable and payable by the Mortgages Trustee to:
13
(A) the Seller (in its capacity as a Beneficiary of the
Mortgages Trust) as Initial Purchase Price or as a Special
Distribution; and/or
(B) Funding (in its capacity as a Beneficiary of the Mortgages
Trust) as a Special Distribution (in respect of Further
Contributions made by Funding 2),
in each case, on such date whether or not such date is a Distribution
Date. Any such Initial Purchase Price or Special Distribution shall
reduce the Seller Share or the Funding Share of the Trust Property
(as applicable) by the amount of such Initial Purchase Price or
Special Distribution received by it.
7. INITIAL FUNDING SHARE, INITIAL SELLER SHARE AND INITIAL FUNDING 2 SHARE
7.1 Initial Funding Share
The "Initial Funding Share" of the Trust Property shall be
(GBP)86.61 at 26 March, 2001 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 26 March, 2001 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 Date 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 Initial Funding 2 Share
The "Initial Funding 2 Share" of the Trust Property shall, following
the acquisition by Funding 2, by way of assignment, from the Seller
of a portion of the Seller's beneficial interest in the Mortgages
Trust in accordance with the Seller (Mortgages Trust) Assignment
Agreement, be (GBP)100. References herein to the "Funding 2 Share"
shall, from (and including) the Funding 2 Programme Date to (but
excluding) the first Closing Date in relation to the issue of Notes
by a Funding 2 Issuer, mean the Initial Funding 2 Share and
thereafter shall mean the Current Funding 2 Share.
7.4 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, the
14
Current Funding 2 Share Percentage and the Current Seller Share
Percentage shall be calculated to five decimal places.
8. ADJUSTMENT OF FUNDING SHARE PERCENTAGE, FUNDING 2 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 Beneficiaries) recalculate the Funding Share,
the Funding Share Percentage, the Funding 2 Share, the
Funding 2 Share 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 in the Mortgage Portfolio (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 a Funding Beneficiary
makes a Contribution (excluding any Deferred Contribution)
to the Mortgages Trustee to increase its respective share of
the Trust Property, the recalculation of the Funding Share,
the Funding Share Percentage, the Funding 2 Share, the
Funding 2 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 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
in the Mortgage Portfolio (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 a Funding Beneficiary
makes a Contribution (excluding any Deferred Contribution)
to the Mortgages Trustee to increase its respective 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 Funding 2
Share, the Funding 2 Share Percentage, the Seller Share and
the Seller Share Percentage on such Assignment Date or
Contribution Date, as applicable, in respect of the period
beginning on (and including) such Assignment Date or
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 Contribution Date, as
applicable, an "Interim Calculation Period"), based on the
aggregate Current Balance of the Mortgage Loans in the
Mortgage Portfolio (as adjusted from time to time) on such
Assignment Date or Contribution Date, as applicable.
15
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 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 and Current Funding 2 Share Percentage
I. 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 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 paragraph (A) of Clause
8.5 (Adjustments to Trust Property) below which
have been allocated to Funding in the Trust
Calculation Period ending on the Relevant
Distribution Date (based on (a) the Current
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 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
16
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 Current
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); and
G = the amount of the Mortgages Trustee Retained
Principal Receipts (if any) plus the aggregate
Current Balance of all the Mortgage Loans in the
Mortgage Portfolio 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 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,
Funding and Funding 2, (ii) the amount of any
Losses or Capitalised Arrears allocated to the
Seller, Funding and Funding 2, (iii) the
adjustments referred to in paragraphs (A) through
(E) of Clause 8.5 (Adjustments to Trust Property)
(inclusive) below (or, if the Seller Share is zero,
the adjustments referred to in paragraph (A) only);
(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 purchase 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
Initial Contribution or Further Contribution made
by Funding or Funding 2 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
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
17
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 4.4 (Application by Mortgages
Trustee) to pay to the Seller in satisfaction (in
part) 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 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 a Funding Beneficiary
pays a Contribution (excluding a Deferred Contribution) to
the Mortgages Trustee to increase its share of the Trust
Property or receives from the Mortgages Trustee a Special
Distribution (where such Special Distribution is not made on
a Distribution Date) in accordance with Clause 11
(Distribution of Principal Receipts), the Cash Manager will
recalculate the Current Funding Share Percentage on each
such Contribution Date (the "Relevant 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 - I
------------- x 100
J
where,
A = the Current Funding Share as calculated on the
Distribution Date immediately preceding such
Relevant Contribution Date;
18
E = (1) if that Relevant Contribution Date is also an
Assignment Date, the amount of any Initial
Contribution paid by Funding to the Mortgages
Trustee on that 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 Contribution Date to increase Funding's
beneficial interest in the Trust Property;
I = the amount of the Special Distribution
distributed to Funding on such date in accordance
with the provisions described in Clause 11
(Distribution of Principal Receipts); 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 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.
II. Current Funding 2 Share Percentage
(A) On each Relevant Distribution Date falling after the Funding
2 Programme Date, the "Current Funding 2 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 2 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", "B", "C", "D" and "G" have the meanings
specified in Clause 8.2(I)(A), provided however that:
(1) references to Funding (including references in any
defined term) are to be read as references to
Funding 2;
(2) references to the first Distribution Date are to be
read as the first Distribution Date following the
Funding 2 Programme Date; and
(3) references to the Initial Closing Date are to be
read as the Funding 2 Programme Date;
(4) prior to the Funding 2 Programme Date, each of the
Current Funding 2 Share and the Current Funding 2
Share Percentage shall be zero.
19
(B) On each Relevant Assignment Date, the Cash Manager will
recalculate the Current Funding 2 Share Percentage 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 2, and such Current Funding 2 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", "E" and "H" have the meanings specified in
clause 8.2(I)(B), provided, however that references to
Funding (including references in any defined term) are to be
read as references to Funding 2.
(C) On each Relevant Contribution Date, the Cash Manager will
recalculate the Current Funding 2 Share Percentage 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 2 on the immediately succeeding
Distribution Date, and such Current Funding 2 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", "E", "F" and "J" have the meanings specified in
clause 8.2(I)(C), provided, however that references to
Funding (including references in any defined term) are to be
read as references to Funding 2.
(D) For the purposes of Clauses 8.2(II)(A), 8.2(II)(B) and
8.2(II)(C) above, in respect of the earliest to occur,
following the Funding 2 Programme Date, of (a) a
Distribution Date, (b) a Contribution Date or (c) an
Assignment Date, item "A" shall be the Initial Funding 2
Share.
8.3 Weighted Average Funding Share Percentage and Weighted Average Funding
2 Share Percentage
(A) Weighted Average Funding Share Percentage:
On any Distribution Date in respect to which:
(1) the Seller had sold and assigned New Mortgage Loans to
the Mortgages Trustee; or
(2) a Funding Beneficiary had made a Contribution
(excluding any Deferred Contribution) to the Mortgages
Trustee to increase its share of the Trust Property;
or
20
(3) Funding or the Seller had received a Special
Distribution from the Mortgages Trustee,
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:
(i) 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 Current 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;
(ii) 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", "B", "C" and "D" have the meanings
specified in Clause 8.3(A)(i) above.
(iii) 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:
(AxB) + (CxD)
where, "A", "B", "C" and "D" have the meanings
specified in Clause 8.3(A)(i) above.
21
(B) Weighted Average Funding 2 Share Percentage
On any Distribution Date in respect to which:
(1) the Seller had sold and assigned New Mortgage Loans to
the Mortgages Trustee; or
(2) a Funding Beneficiary had made a Contribution
(excluding any Deferred Contribution) to the Mortgages
Trustee to increase its share of the Trust Property;
or
(3) Funding or the Seller had received a Special
Distribution from the Mortgages Trustee,
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 2 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 2 Share Percentage"
for any such Distribution Date will be equal to:
(i) 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", "B", "C" and "D" have the meanings
specified in Clause 8.3(A)(i) above; provided
however that the references to Current Funding Share
Percentage are to be read as references to Current
Funding 2 Share Percentage.
(ii) 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", "B", "C" and "D" have the meanings
specified in Clause 8.3(A)(i) above; provided
however that the references to Current Funding Share
Percentage are to be read as references to Current
Funding 2 Share Percentage.
(iii) 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:
22
(AxB) + (CxD)
where, "A", "B", "C" and "D" have the meanings
specified in Clause 8.3(A)(i) above; provided
however that the references to Current Funding
Share Percentage are to be read as references to
Current Funding 2 Share Percentage.
8.4 Current Funding Share and Current Funding 2 Share
I. 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(I)(A) above.
(B) On each Assignment Date (which is not also a 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(I)(B) above.
(C) On each 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 - I
where "A", "E" and "F" and "I" have the meanings specified
in Clause 8.2(I)(C) above.
II. Current Funding 2 Share
(A) On each Distribution Date, the "Current Funding 2 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 (subject to Clause 8.2(II)(D)) "A", "B", "C" and "D"
have the meanings specified in Clause 8.2(II)(A) above.
23
(B) On each Assignment Date (which is not also a Contribution
Date), the Current Funding 2 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 (subject to Clause 8.2(II)(D)) "A" and "E" have the
meanings specified in Clause 8.2(II)(B).
(C) On each Contribution Date, the Current Funding 2 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 (subject to Clause 8.2(II)(D)) "A", "E" and "F" have
the meanings specified in Clause 8.2(II)(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 in the Mortgage
Portfolio 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 Mortgage Portfolio 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 in the Mortgage Portfolio
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)
was assigned to the Mortgages Trustee 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 and 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 in the Mortgage Portfolio 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
24
(C) both the Security Trustee and the Funding 2 Security Trustee
are 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):
(1) to be unenforceable; and/or
(2) 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 in the Mortgage
Portfolio 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
Secured Loan, the Seller elects to purchase the relevant
Mortgage Loan or Mortgage Loans under the relevant Mortgage
Account (including any Personal Secured Loans and any
Further Draws made thereunder secured over the same
Mortgaged Property) 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 in
the Mortgage Portfolio 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 in the
Mortgage Portfolio shall be deemed for the purposes of
making the Trust Property Calculation 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) (including any resulting loss in
respect thereof) of this Clause and any losses arising in
respect of any Personal Secured Loans shall, subject to
Clause 9.1 (Initial Minimum Seller Share), be allocated on
the relevant Distribution
25
Date, Assignment Date or 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 (in respect of paragraph (A) only) shall be
allocated to the Funding Share and the Funding 2 Share of
the Trust Property pro rata in accordance with the Funding
Proportion and the Funding 2 Proportion. 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 or any Personal Secured Loan in respect of which
losses have arisen 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 and to Funding 2 pro rata in
accordance with the Funding Proportion and the Funding 2
Proportion (but only if and to the extent that the related
reductions or deemed reductions were applied against the
Funding Share and the Funding 2 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 Mortgages 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 Funding 2 and/or the Seller
(separate from the Mortgages Trust), as the case may
require.
8.6 Current Seller Share Percentage
(A) On each Relevant 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% minus the sum of the Current Funding Share Percentage
and the Current Funding 2 Share Percentage
where the Current Funding Share Percentage and the Current
Funding 2 Share Percentage are calculated on such Relevant
Distribution Date in accordance with Clause 8.2(I)(A) and
(subject to Clause 8.2(II)(D)) Clause 8.2(II)(A)
respectively.
(B) On each Relevant 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% minus the sum of the Current Funding Share Percentage
and the Current Funding 2 Share Percentage
where the Current Funding Share Percentage and the Current
Funding 2 Share Percentage are as calculated on such
Relevant Assignment Date in accordance
26
with Clause 8.2(I)(B) and (subject to Clause 8.2(II)(D))
Clause 8.2(II)(B) respectively.
(C) On each Relevant 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% minus the sum of the Current Funding Share Percentage
and the Current Funding 2 Share Percentage
where the Current Funding Share Percentage and the Current
Funding 2 Share Percentage are as calculated on such
Relevant Contribution Date in accordance with Clause
8.2(I)(C) and (subject to Clause 8.2(II)(D)) Clause
8.2(II)(C) respectively.
8.7 Weighted Average Seller Share Percentage
On any Distribution Date in respect to which:
(1) the Seller has assigned New Mortgage Loans to the Mortgages
Trustee; or
(2) a Funding Beneficiary has made a Contribution (excluding a
Deferred Contribution) to the Mortgages Trustee to increase
its share of the Trust Property; or
(3) Funding or the Seller had received a Special Distribution
from the Mortgages Trustee,
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% minus the sum of the Weighted Average Funding Share
Percentage and the Weighted Average Funding 2 Share Percentage
where such Weighted Average Funding Share Percentage and
Weighted Average Funding 2 Share Percentage are as
calculated on such Distribution Date in accordance with
Clauses 8.3(A)(i) and 8.3(B)(i) respectively;
(B) in respect of the distribution of Principal Receipts to be
made on such Distribution Date:
100% minus the sum of the Weighted Average Funding Share
Percentage and the Weighted Average Funding 2 Share Percentage
27
where such Weighted Average Funding Share Percentage and
Weighted Average Funding 2 Share Percentage are as
calculated on such Distribution Date in accordance with
Clauses 8.3(A)(ii) and 8.3(B)(ii) respectively; and
(C) in respect of the allocation of Losses to be made on such
Distribution Date:
100% minus the sum of the Weighted Average Funding Share
Percentage and the Weighted Average Funding 2 Share Percentage
where such Weighted Average Funding Share Percentage and
Weighted Average Funding 2 Share Percentage are as
calculated on such Distribution Date in accordance with
Clauses 8.3(A)(iii) and 8.3(B)(iii) respectively.
8.8 Current Seller Share
(A) On each Relevant 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 (excluding
Revenue Receipts) as at the Relevant Distribution Date minus
the sum of the Current Funding Share and the Current Funding
2 Share
where "Current Funding Share" and "Current Funding 2 Share"
are as calculated on such Relevant Distribution Date in
accordance with Clauses 8.4(I)(A) and 8.4(II)(A)
respectively.
(B) On each Relevant 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 (excluding
Revenue Receipts) as at an Assignment Date minus the sum of
the Current Funding Share and the Current Funding 2 Share
where "Current Funding Share" and "Current Funding 2 Share"
are as calculated on such Relevant Assignment Date in
accordance with Clauses 8.4(I)(B) and 8.4(II)(B) above.
(C) On each Relevant 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 (excluding
Revenue Receipts) as at a Contribution Date minus the sum of
the Current Funding Share and the Current Funding 2 Share
where "Current Funding Share" and "Current Funding 2 Share"
are as calculated on such Relevant Contribution Date in
accordance with Clauses 8.4(I)(C) and 8.4(II)(C)
respectively.
28
8.9 Funding Share/Funding 2 Share/Seller Share
The Funding Share, the Funding 2 Share and the Seller Share may not
be reduced below zero. At all times the sum of the Funding Share
Percentage, the Funding 2 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 both the Funding Share and
the Funding 2 Share of the Trust Property are 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 in the Mortgage Portfolio 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 Mortgage Portfolio (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 in respect of Mortgage
Loans included in the Mortgage Portfolio 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 Borrowers
29
may make in respect of Personal Secured Loans
included in the Mortgage Portfolio (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 are included in the Mortgage Portfolio 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 Mortgage Portfolio, in each
case 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.
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 Mortgages Trustee Transaction
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 8.5 (Adjustments to Trust Property), 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 in the
following order of priority:
(A) first, in no order of priority between them but in
proportion to the respective amounts due of:
(1) 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
30
(2) 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) second, in no order of priority between them but in
proportion to the respective amounts due of:
(1) 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
(2) 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) third, 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:
(1) 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
(2) Funding, in an amount which is equal to the lesser of:
(i) 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, as the case may be, the
Funding Post-Enforcement Priority of Payments
(but excluding any principal amount due under
any Funding 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 a Funding
Issuer to credit that Funding Issuer's Principal
Deficiency Ledger and thereby reduce the
principal payable under that Funding Issuer's
Intercompany Loan) and any amount of Deferred
Contribution due under paragraph (p) of the
Funding Pre-Enforcement Revenue Priority of
Payments and/or paragraph (F) of the Funding
Post-Enforcement Priority of Payments), less all
other amounts (not derived from the
31
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
(ii) 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);
(3) Funding 2 in an amount which is equal to the lesser of:
(i) the aggregate of the amounts to be applied on
any Monthly Payment Date falling in the
immediately succeeding Monthly Payment Period as
set forth under the Funding 2 Pre-Enforcement
Revenue Priority of Payments or, as the case may
be, the Funding 2 Post-Enforcement Priority of
Payments (but excluding any principal amount due
under the Global Intercompany Loan Agreement
(save that, for the avoidance of doubt, such
exclusion shall not apply in respect of any
Funding 2 Available Revenue Receipts which are
applied by Funding 2 to credit any Principal
Deficiency Subledgers and thereby reduce the
principal payable under the related Loan
Tranches) and any amount of Deferred
Contribution under paragraph (X) of the Funding
2 Pre-Enforcement Revenue Priority of Payments
and/or paragraph (O) of the Funding 2
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 2
Available Revenue Receipts for the immediately
succeeding Monthly Payment Period, such amount
not to be less than zero; and
(ii) an amount determined by multiplying the total
amount of the remaining Mortgages Trustee
Available Revenue Receipts by the Current
Funding 2 Share Percentage of the Trust
Property, as determined on the immediately
preceding Distribution Date;
(D) fourth, to allocate:
(i) to Funding but pay at the direction of Funding to the
Seller an amount equal to the Funding Proportion of YY
- ZZ; and
(ii) to Funding 2 but pay at the direction of Funding 2 to
the Seller an amount equal to the Funding 2 Proportion
of 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
32
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 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)(1) above, (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 Funding (Mortgages
Trust) Revenue Amounts pursuant to Clause 10.2(C)(2) and Clause 10.3
(Calculation of Funding (Mortgages Trust) Revenue Amount and Funding
2 (Mortgages Trust) Revenue Amount) and (iii) the Weighted Average
Funding 2 Share Percentage (instead of the Current Funding 2 Share
Percentage) as calculated pursuant to Clause 8.3(B) above in
determining the amount of Funding 2 (Mortgages Trust) Revenue Amounts
pursuant to Clause 10.2(C)(2) and Clause 10.3 (Calculation of Funding
(Mortgages Trust) Revenue Amount and Funding 2 (Mortgages Trust)
Revenue Amount).
11. DISTRIBUTION OF PRINCIPAL RECEIPTS
11.1 Distribution of Principal Receipts prior to the occurrence of a
Trigger Event
Subject as provided in Clause 8.6 (Adjustments to Trust Property),
prior to the occurrence of a Trigger Event (and whether or not there
has been an enforcement of the Funding Security, the Funding 2
Security, any Funding Issuer Security or any Funding 2 Issuer
Security), on each Distribution Date (or, in respect of any Initial
Purchase Price or Special Distribution, on any 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
Purchase Price (if any) or Special Distribution which is
then allocable and payable to the Seller under Clause 6.4
(Distribution) above;
(B) second, to Funding the amount of any Special Distribution
which is then allocable and payable to Funding in accordance
with Clause 6.4 (Distribution) above;
(C) third, in no order of priority between them but in
proportion to the respective amounts due:
(1) to Funding an amount in respect of each Funding Issuer
which is equal to the lesser of:
(a) (i) prior to the occurrence of an ACA Trigger
Event, the principal amount due on the
Funding Intercompany Loan of such Funding
Issuer equal to the Controlled Amortisation
Amounts due, if any, on such Funding
33
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
(ii) upon and after the occurrence of an ACA
Trigger Event, (x) in respect of each
Funding Issuer that is not an ACA Issuer,
an amount as set forth in (1)(a)(i) 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
(b) an amount in respect of each Funding Issuer
equal to:
Current Funding Share Outstanding
Percentage as Principal Balance
calculated on the on such Funding
immediately preceding Issuer's Funding
Distribution Date (or, Intercompany Loan
Mortages in the case of the first ----------------------
Trustee X Distribution Date X Aggregate
Principal Receipts following the Closing Outstanding
Date in respect of such Principal Balance
Issuer, as of the on all Funding
relevant Closing Date) Intercompany
Loans
(2) to Funding 2 in an amount equal to the lesser of:
(a) if Funding 2 has a Repayment Requirement on that
Distribution Date, the amount of such Repayment
Requirement; and
(b) an amount determined by multiplying the total
amount of remaining Mortgages Trustee Principal
Receipts by the Current Funding 2 Share
Percentage of the Trust Property;
(D) fourth, in no order between them but in proportion to the
respective amounts due to Funding and Funding 2, to the
extent not already paid pursuant to item (C) above, up to
the amounts set forth in item (C)(1)(a) and item (C)(2)(a)
above, respectively; and
(E) fifth, if such Distribution Date is not a Seller Share Event
Distribution Date, to allocate to the Seller an amount equal
to AA - BB, where "AA" is the amount of Mortgages Trustee
Principal Receipts and "BB" is the amount of such Mortgages
Trustee Principal Receipts applied and/or allocated under
(A) through (D) above;
34
provided that, if an Assignment Date or a Contribution Date
has occurred during the Trust Calculation Period immediately
preceding that Distribution Date, then the Cash Manager will
use (i) the Weighted Average Funding 2 Share Percentage
(instead of the Funding 2 Share Percentage) in determining
the amount of Mortgages Trustee Principal Receipts to
distribute to Funding 2 on that Distribution Date and (ii)
the Weighted Average Funding Share Percentage in determining
the amount of Mortgages Trustee Principal Receipts to
distribute to Funding on that Distribution Date.
PROVIDED THAT in relation to (A) through (E) above the following rules (the
"Rules for the application of Mortgages Trustee Principal Receipts") shall
apply:
(1) (a) If the Notes of any Funding 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 Funding Issuer has (and
the other Intercompany Loans of any other
Funding Issuers have) become immediately due and
payable as a result of the service of an
Intercompany Loan Enforcement Notice on Funding,
principal payments in respect of the
Intercompany Loan of that Funding Issuer may be
made in excess of any Controlled Amortisation
Amount and paragraph (C)(1)(a) above shall no
longer apply in relation to that Funding 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 Funding Issuer on that Distribution Date
may not exceed the amount determined under
paragraph (C)(1)(b) above.
(b) If the Notes of any Funding 2 Issuer have become
immediately due and payable as a result of the
service of an Issuer Enforcement Notice or if
the Loan Tranches under any Funding 2
Intercompany Loan Agreement have become
immediately due and payable as a result of the
service of a Funding 2 Intercompany Loan
Enforcement Notice, principal payments in
respect of the Funding 2 Intercompany Loan may
be made in excess of any Bullet Repayment Loan
Amount, Scheduled Repayment Loan Amount or
Controlled Repayment Loan Amount and paragraph
(C)(2)(a) above shall no longer apply and,
except following a Non-Asset Trigger Event, the
amount of Mortgages Trustee Principal Receipts
to be distributed to Funding 2 on that
Distribution Date may not exceed the amount
determined under paragraph (C)(2)(b) above.
(2) (a) If the Notes of any Funding 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 Funding Issuer has (and
the other Intercompany Loans of any other
Funding Issuers have) become immediately due and
payable as a result of the service of an
Intercompany Loan Enforcement Notice on Funding,
then for the purpose of calculating the amount
in respect of that Funding Issuer under
paragraph (C)(1)(b) 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
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that Funding Issuer which are to be utilised on
the immediately succeeding Payment Date to repay
principal on that Funding Issuer's Intercompany
Loan, but only to the extent that those amounts
would not otherwise be payable on that Funding
Intercompany Loan on that Payment Date.
(b) If the Notes of any Funding 2 Issuer have become
immediately due and payable as a result of the
service of an Issuer Enforcement Notice or if
the Loan Tranches advanced under the
Intercompany Loan Agreement of any Funding 2
Issuer has (and the Loan Tranches advanced under
any Intercompany Loan Agreements of any other
Funding 2 Issuers have) become immediately due
and payable as a result of the service of an
Intercompany Loan Enforcement Notice on Funding
2, then for the purpose of calculating the
amount under paragraph (C)(2)(b) above, that
amount will be reduced to the extent of any
remaining amounts standing to the credit of the
Funding 2 Reserve Ledger and/or the Funding 2
Liquidity Reserve Ledger (if any) which are to
be utilised on any Monthly Payment Date falling
in the immediately succeeding Monthly Payment
Period to repay principal on that Funding 2
Issuer's Intercompany Loan, but only to the
extent that those amounts would not otherwise be
payable on any Funding 2 Intercompany Loan in
that Monthly Payment Period.
(3) (a) The amount of Mortgages Trustee Principal
Receipts payable to Funding in respect of each
Funding Issuer on a Distribution Date will be
reduced in proportion to the aggregate of the
Issuer Available Revenue Receipts of that
Funding 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 Funding Issuer, but
only to the extent that the Funding 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.
(b) The amount of Mortgages Trustee Principal
Receipts payable to Funding 2 on a Distribution
Date will be reduced in proportion to the
aggregate of Mortgages Trustee Available Revenue
Receipts allocable to Funding 2 on such
Distribution Date which are to be applied on any
Monthly Payment Date falling in the immediately
succeeding Monthly Payment Period in reduction
of deficiencies recorded on the Funding 2
Principal Deficiency Ledger, but only to the
extent that the Mortgages Trustee Available
Revenue Receipts which are to be so applied in
that Monthly Payment Period would not otherwise
be payable as principal of the relevant Notes to
be paid in that Monthly Payment Period.
(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 Funding Issuer under (B) and (D) above, the
Outstanding Principal Balance of that Intercompany Loan
shall be deemed to be reduced by the amount of:
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(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 as 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
(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 Funding 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) 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 Funding 2 in no
order of priority among them and pro rata in accordance with
the Funding Proportion and the Funding 2 Proportion; and
then
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(b) among Funding, Funding 2 and the Seller, in no order of
priority among them and pro rata according to their
respective Shares of the Trust Property until the Funding
Share and the Funding 2 Share of the Trust Property are
reduced to zero (and, for the avoidance of doubt, such
payments may reduce the Seller Share of the Trust Property
to an amount less than the Minimum Seller Share).
Notwithstanding the foregoing, if an Assignment Date or a
Contribution Date has occurred during the Trust Calculation
Period immediately preceding any such Distribution Date, the
Cash Manager will apply all Mortgages Trustee Principal
Receipts remaining after (a) above among Funding, Funding 2
and the Seller in no order of priority between them but in
proportion to the Weighted Average Funding Share Percentage,
the Weighted Average Funding 2 Share Percentage and the
Weighted Average Seller Share Percentage, each in respect of
Mortgages Trustee Principal Receipts, for that Distribution
Date until the Funding Share and Funding 2 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
and Funding 2 in no order of priority among them and pro rata in
accordance with the Funding Proportion and the Funding 2 Proportion
until the Funding Share and the Funding 2 Share of the Trust Property
have 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 8.5
(Adjustments to Trust Property) of this Deed), all Losses sustained
on the Mortgage Loans (other than any Personal Secured Loans) during
a Trust Calculation Period shall be applied in reducing pro rata the
Funding Share of the Trust Property, the Funding 2 Share of the Trust
Property and the Seller Share of the Trust Property on the
Distribution Date immediately succeeding such Trust Calculation
Period by multiplying the Losses sustained in the relevant Trust
Calculation Period by the Funding Share Percentage and the Funding 2
Share Percentage, respectively, (in each case as calculated on the
Distribution Date immediately preceding such Trust Calculation
Period) until the Funding Share of the Trust Property and the Funding
2 Share of the Trust Property are both zero, PROVIDED THAT if during
the Trust Calculation Period immediately preceding a Distribution
Date the Seller has sold and assigned New Mortgage Loans to the
Mortgages Trustee or if Funding or Funding 2 made a Further
Contribution to the Mortgages Trustee to increase the Funding Share
or the Funding 2 Share of the Trust Property, such Losses shall be
multiplied by the Weighted Average Funding Share Percentage and the
Weighted Average Funding 2 Share Percentage, as applicable (in each
case as calculated on such Distribution Date pursuant to Clause
8.3(A)(3) or 8.3(B)(3) above) rather than the Funding Share
Percentage and/or the Funding 2 Share Percentage. The remainder of
such Losses shall be allocated to the Seller.
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12.2 All losses sustained during a Trust Calculation Period on Personal
Secured Loans in the Mortgage Portfolio shall be applied first 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 and
the Funding 2 Share of the Trust Property on a pro rata basis in
accordance with the Funding Proportion and the Funding 2 Proportion.
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.
14. ARREARS
The aggregate Current Balance of the Mortgage Loans in the Mortgage
Portfolio will be increased at any time by the amount in which the
Mortgage Loans that have been sold and assigned to the Mortgages
Trustee 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:
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(a) the Principal Ledger, which shall record (i) all receipts of
Principal Receipts and distribution of the same to Funding,
Funding 2 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/Funding 2 Share/Seller Share Ledger which
shall record the Funding Share, the Funding 2 Share and the
Seller Share of the Trust Property, and the Funding Share
Percentage, the Funding 2 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;
(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 Funding 2 of
Contributions to the Mortgages Trust, (iii) 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 Special Distribution in accordance with
the terms of this Deed and the application of such
Contributions by the Mortgages Trustee in payment to Funding
of any Special Distribution in accordance with the terms of
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.
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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, the Funding 2 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. BENEFICIARY DIRECTIONS
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), Clause 17.7 (Controlling
Directions) and to any agreement between the Beneficiaries, the
Mortgages Trustee covenants with the Beneficiaries that the Mortgages
Trustee shall take all necessary steps and do everything which the
Funding Beneficiaries and the Seller (acting together) may reasonably
request or direct it to do in order to give effect to the terms of
this Deed or the other Transaction Documents to which the Mortgages
Trustee is a party; provided that at any time after the Funding Share
and the Funding 2 Share have both been reduced to zero the Mortgages
Trustee shall not be required to act at the direction of the Funding
Beneficiaries 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, Funding 2 and the Seller covenants with each other
and with the Mortgages Trustee that none of them 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 Mortgages Trustee entitled to decline to follow directions
The Mortgages Trustee shall have the right to decline to follow any
such direction if the Mortgages Trustee, being advised by counsel,
determines that the proceedings, actions or steps may not be lawfully
taken or if the Mortgages Trustee in good faith determines that the
proceedings, actions or steps so directed would be illegal or involve
it in personal liability (save where it has been indemnified and/or
secured to its satisfaction against such liability).
17.5 Mortgages Trustee to provide information
When the Mortgages Trustee is required to take any proceedings,
actions or steps under or in connection with the Transaction
Documents for which it requires
41
directions from the Funding Beneficiaries and the Seller, it shall as
soon as reasonably practicable, provide sufficient information to the
Funding Beneficiaries and the Seller as they may require in order to
be able to give such directions.
17.6 Timing of directions
Where a Beneficiary directs the Mortgages Trustee as to any matter,
such Beneficiary shall give written particulars of such direction to
the Mortgages Trustee and each other Beneficiary.
17.7 Controlling Directions
Except in the case of Clause 18 (Early Termination of the Mortgages
Trust), in which case the terms of Clause 18 (Early Termination of
the Mortgages Trust) shall prevail, in the event of any conflict
between the directions of the Beneficiaries then each Beneficiary
irrevocably agrees that the Controlling Directions shall apply and as
such, the Mortgages Trustee is to follow the Controlling Directions
as if it were the direction of all Beneficiaries but if there is no
Controlling Directions the Mortgages Trustee shall not act.
17.8 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.
17.9 Covenant of the Mortgages Trustee
Subject to the foregoing provision of this Clause 17 (Beneficiary
Directions) the Mortgages Trustee covenants with each of the Seller,
Funding and Funding 2 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.
17.10 Mortgages Trustee not liable
Provided that the Mortgages Trustee has complied with the provisions
of this Clause 17 (Beneficiary directions), the Mortgages Trustee
shall not be liable to the Beneficiaries notwithstanding that the way
in which the relevant discretion, trust, power or remedy was
exercised by the Mortgages Trustee did not reflect the particular
wishes of any Beneficiary.
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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, and further provided that all
amounts due from Funding 2 to the Funding 2 Secured Creditors have
been repaid in full and the Funding 2 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, Funding 2 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, Funding 2 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 Moody's then, if required
by Moody's, 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) in
the Mortgage Portfolio 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 on Funding of an
Intercompany Loan Enforcement Notice (which right is hereby
conferred), Funding covenants with each of the Seller and Funding 2
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 Funding 2 shall not assign
Subject to the right of Funding 2 to assign by way of security its
right, title, benefit and interest in the Trust Property and/or under
this Deed to the Funding 2 Security Trustee under the Funding 2 Deed
of Charge and subject to the right of the Funding 2 Security Trustee
or a Receiver to sell the Funding 2 Share of the Trust Property
and/or such right and interest under this Deed following the service
on Funding 2 of an Intercompany Loan Enforcement Notice (which right
is hereby conferred), Funding 2 covenants with each of the Seller and
Funding that it shall not, and shall not purport
43
to, sell, assign, transfer, convey, charge, declare a trust over,
create any beneficial interest in, or otherwise dispose of the Funding
2 Share in the Trust Property, or any of Funding 2's rights, title,
interest or benefit in any of the Mortgage Portfolio or the Trust
Property.
20.3 Seller shall not assign
The Seller covenants with each of Funding and Funding 2 that it shall
not, and shall not purport to, sell, assign, transfer, convey,
charge, declare a trust over, create any beneficial interest in, or
otherwise dispose of the Seller Share in the Trust Property or any of
the Seller's rights, title, 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;
44
(f) Borrowings: incur any indebtedness in respect of borrowed
money whatsoever or give any guarantee or indemnity in
respect of any such indebtedness;
(g) Merger: consolidate or merge with any other person or convey
or transfer its properties or assets substantially 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. POWER 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 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
45
applicable law) the Trustee Act 2000 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), Funding 2 (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.
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,
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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, Funding nor Funding 2 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 and Funding 2 of all amounts owing
under the Funding Intercompany Loan Agreements and/or the Funding 2
Intercompany Loan Agreements, as applicable, and under the other
Transaction Documents, neither the Seller, Funding nor Funding 2
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, Funding and Funding 2 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.
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.
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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) or the agent
of Funding 2 (or vice versa) or Funding the agent of Funding 2 (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;
(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;
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(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 or Funding 2 (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. NON PETITION COVENANT; LIMITED RECOURSE
31.1 Non Petition Covenant
Each of the parties hereto hereby agrees that it shall not institute
against either Funding, Funding 2 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.
31.2 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 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:
(A) 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;
(B) 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
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(C) 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.
(c) in relation to Funding 2:
(A) only the Funding 2 Security Trustee may enforce the
security created in favour of the Funding 2
Security Trustee under the Funding 2 Deed of Charge
in accordance with the provisions thereof;
(B) 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 2
under this Deed shall be payable by Funding 2
except to the extent that Funding 2 has sufficient
funds available or (following enforcement of the
Funding 2 Security) the Funding 2 Security Trustee
has realised sufficient funds from the Funding 2
Security to pay such sum subject to and in
accordance with the relevant Funding 2 Priority of
Payments and provided that all liabilities of
Funding 2 required to be paid in priority thereto
or pari passu therewith pursuant to such Funding 2
Priority of Payments have been paid, discharged
and/or otherwise provided for in full; and
(C) it shall not take any steps for the purpose of
recovering any amount payable by Funding 2 or
enforcing any rights arising out of this Deed
against Funding 2 otherwise than in accordance with
the Funding 2 Deed of Charge.
31.3 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.
32. AMENDMENTS AND WAIVER
32.1 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.
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32.2 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.
32.3 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.
33. 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 609 333)
for the attention of the Company Secretary (with a copy to
the Seller in accordance with (a) above);
(c) in the case of Funding, to Granite Finance Funding Limited,
00 Xxxx Xxxxxxx Xxxxxx, Xxxxxx XX0X 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 4637) for the attention of the
Trustee Administration Manager;
(e) in the case of Funding 2, to Granite Finance Funding 2
Limited situated at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx
XX0X 0XX (facsimile number 020 7606 0643) for the attention
of The Company Secretary (with a copy to the Seller in
accordance with (a) above);
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(f) in the case of the Funding 2 Security Trustee, to The Bank
of New York, 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx, X00 0XX
(facsimile number 020 7964 4637) for the attention of the
Trustee Administration Manager;
(g) 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;
(h) 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);
(i) 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 33.
34. 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.
35. EXECUTION IN COUNTERPARTS; SEVERABILITY
35.1 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.
35.2 Severability
Where any provision in or obligation under this Deed shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or
obligations under this Deed, or of such provision or obligation in
any other jurisdiction, shall not be affected or impaired thereby.
36. GOVERNING LAW AND SUBMISSION TO JURISDICTION
36.1 Governing Law
This Deed is governed by, and shall be construed in accordance with,
English law.
36.2 Submission to Jurisdiction
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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.
36.3 Process Agent
The Mortgages Trustee irrevocably and unconditionally appoints
Mourant & Co. Capital (SPV) Limited at 00 Xxxx Xxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX or otherwise at its registered office for the time being as
its agent for service of process in England in respect of any
proceedings in respect of this Agreement and undertakes that in the
event of Mourant & Co. Capital (SPV) Limited ceasing so to act it
will appoint another person with a registered office in London as its
agent for service of process.
36.4 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, rule 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.
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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.
as Beneficiary, Cash Manager and Seller
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
NORTHERN ROCK PLC )
by its duly authorised attorney )
-------------------------------
Name:
in the presence of:
Signature _______________________________
Witness
Full name
Occupation Trainee Solicitor
Address c/o Sidley Xxxxxx Xxxxx & Xxxx
Woolgate Exchange
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
55
as Mortgages Trustee
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
a company incorporated in Jersey, Channel Islands, by )
and , being persons )
who, in accordance with the laws of that territory are )
acting under the authority of the company )
-------------------------------
Name:
-------------------------------
Name:
in the presence of:
Signature _______________________________
Witness
Full name
Occupation
Address
56
as Funding and a Beneficiary
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
a company incorporated in Jersey, Channel Islands, by )
and , being persons )
who, in accordance with the laws of that territory are )
acting under the authority of the company )
-------------------------------
Name:
-------------------------------
Name:
in the presence of:
Signature _______________________________
Witness
Full name
Occupation
Address
57
as Funding 2 and a Beneficiary
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
GRANITE FINANCE FUNDING 2 LIMITED )
acting by two directors )
-------------------------------
for and on behalf of
LDC Securitisation Director No. 1 Limited
Director
Name:
-------------------------------
for and on behalf of
LDC Securitisation Director No. 2 Limited
Director
Name:
58
