Exhibit 4.2
DRAFT
AMENDED AND RESTATED MORTGAGES TRUST DEED
DATED [1st April], 2004
ABBEY NATIONAL PLC
and
▇▇▇▇▇▇ FUNDING LIMITED
and
▇▇▇▇▇▇ TRUSTEES LIMITED
and
SPV MANAGEMENT LIMITED
▇▇▇▇▇ & ▇▇▇▇▇
London
CONTENTS
Clause Page
1. Definitions and Construction...............................................2
2. Creation of Mortgages Trust................................................2
3. Conditions Precedent.......................................................3
4. Acquisition by Funding of an Increased Interest in the Trust Property......3
5. Acquisition by Seller of an Interest Relating to Capitalised Interest......5
6. Payment by the Seller to Funding of the amount outstanding under an
Intercompany Loan........................................................6
7. Initial Funding Share and Initial Seller Share.............................7
8. Adjustment of Funding Share Percentage and Seller Share Percentage
on Distribution Dates....................................................7
9. Minimum Seller Share......................................................10
10. Allocation and Distribution of Revenue Receipts...........................11
11. Allocation and Distribution of Principal Receipts.........................12
12. Allocation of Losses......................................................15
13. Ledgers...................................................................15
14. Costs and Expenses of the Mortgages Trustee...............................15
15. Directions from Beneficiaries.............................................16
16. Early Termination of the Mortgages Trust..................................16
17. Transfers.................................................................17
18. Covenants of the Mortgages Trustee........................................17
19. Power to Delegate.........................................................18
20. Powers of Investment......................................................18
21. Other Provisions Regarding the Mortgages Trustee..........................19
22. No Retirement of Mortgages Trustee........................................20
23. Termination...............................................................20
24. Further Assurances........................................................20
25. Amendments, Etc...........................................................20
26. Non Petition Covenant.....................................................21
27. No Partnership or Agency..................................................21
28. Calculations..............................................................21
29. No Waiver; Remedies.......................................................21
30. Execution in Counterparts; Severability...................................21
31. Confidentiality...........................................................22
32. Exclusion of Third Party Rights...........................................22
33. Addresses for Notices.....................................................22
34. Governing Law and Submission to Jurisdiction..............................23
35. Exclusion of Trustee Act 2000.............................................23
Signatories...................................................................25
THIS AMENDED AND RESTATED MORTGAGES TRUST DEED is made on [1st April], 2004
BETWEEN:
(1) ABBEY NATIONAL PLC (registered number 2294747), a public limited company
incorporated under the laws of England and Wales whose registered office
is at Abbey National House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇'▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇ in its capacity as Seller, Beneficiary and Cash Manager;
(2) ▇▇▇▇▇▇ FUNDING LIMITED (registered number 3982428), a private limited
company incorporated under the laws of England and Wales whose registered
office is at Abbey National House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇ in its capacity as a Beneficiary;
(3) ▇▇▇▇▇▇ TRUSTEES LIMITED (registered number 3982431), a private limited
company incorporated under the laws of England and Wales whose registered
office is at Abbey National House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇ in its capacity as Mortgages Trustee; and
(4) SPV MANAGEMENT LIMITED (registered number 2548079), a private limited
company incorporated under the laws of England and Wales whose registered
office is at Tower 42, International Finance Centre, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
WHEREAS:
(A) SPV Management agreed to constitute the Mortgages Trust in favour of
Funding and the Seller on the terms and subject to the conditions set out
in the Mortgages Trust Deed dated 25th July, 2000 (as amended and/or
restated from time to time, the Mortgages Trust Deed).
(B) The Mortgages Trustee agreed to hold the Trust Property as trustee for the
Beneficiaries upon, with and subject to the trusts, powers and provisions
of the Mortgages Trust Deed.
(C) The Seller carries on the business of, inter alia, originating residential
first mortgage loans to individual Borrowers in England, Wales and
Scotland and of managing and administering such mortgage loans. The Seller
assigned an initial portfolio of such mortgage loans on 26th, July 2000
and new portfolios of such mortgages loans on subsequent dates to the
Mortgages Trustee pursuant to the Mortgage Sale Agreement, which portfolio
is held by the Mortgages Trustee as trustee for the Beneficiaries upon,
with and subject to the trusts, powers and provisions of the Mortgages
Trust Deed.
(D) On 29th November, 2000 the parties to the Mortgages Trust Deed agreed to
amend the terms of the Mortgages Trust Deed as set out in an Amendment
Agreement to the Mortgages Trust Deed to provide for repayment by Funding
of its obligations in respect of certain term advances known as Scheduled
Amortisation Term Advances.
(E) On 23rd May, 2001 the parties to the Mortgages Trust Deed again agreed to
amend the terms of the Mortgages Trust Deed as set out in the Second Deed
of Amendment to the Mortgages Trust Deed to exclude application of the
Trustee ▇▇▇ ▇▇▇▇.
(F) On 5th July, 2001 the parties to the Mortgages Trust Deed agreed to amend
and restate the terms of the Mortgages Trust Deed as set out in the
Amended and Restated Mortgages Trust Deed of the same date.
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(G) On 8th November, 2001 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in the
Amended and Restated Mortgages Trust Deed of the same date.
(H) On 7th November, 2002 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in the
Amended and Restated Mortgages Trust Deed of the same date.
(I) On 26th March, 2003 the parties to the Mortgages Trust Deed agreed to
amend and restate the terms of the Mortgages Trust Deed as set out in the
Amended and Restated Mortgages Trust Deed of the same date.
(J) The parties to the Mortgages Trust Deed have again agreed to amend and
restate the terms of the Mortgages Trust Deed as set out herein.
NOW THIS DEED WITNESSES:
1. DEFINITIONS AND CONSTRUCTION
1.1 The Amended and Restated Master Definitions and Construction Schedule
signed for the purposes of identification by ▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇
and May on [1st April], 2004 (as the same may be amended, varied or
supplemented from time to time with the consent of the parties hereto) is
expressly and specifically incorporated into this Agreement and,
accordingly, the expressions defined in the Amended and Restated Master
Definitions and Construction Schedule (as so amended, varied or
supplemented) shall, except where the context otherwise requires and save
where otherwise defined herein, have the same meanings in this Agreement,
including the Recitals hereto and this Agreement shall be construed in
accordance with the interpretation provisions set out in Clause 2 of that
Amended and Restated Master Definitions and Construction Schedule.
1.2 This Deed amends and restates the Mortgages Trust Deed made on 25th July,
2000 between the parties hereto as amended on 29th November, 2000 and 23rd
May, 2001 and amended and restated on 5th July, 2001, 8th November, 2001,
7th November, 2002 and 26th March, 2003 (the Principal Deed). As of the
date of this Deed, any future rights or obligations (excluding such
obligations accrued to the date of this Deed) of a party under the
Principal Deed shall be extinguished and shall instead be governed by this
Deed.
2. CREATION OF MORTGAGES TRUST
2.1 Initial Trust Property
On 25th July, 2000 SPV Management settled on trust the sum of (pound)100
(one hundred pounds) (the Initial Trust Property) to be held on trust
absolutely as to both capital and income by the Mortgages Trustee for the
benefit, as tenants in common, of the Seller as to the Initial Seller
Share Percentage and Funding as to the Initial Funding Share Percentage.
2.2 Initial Closing Trust Property
Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
assigned the Initial Closing Trust Property on the Initial Closing Date.
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2.3 Future Trust Property
From time to time and pursuant to the Mortgage Sale Agreement, the Seller
has assigned and intends to assign Future Trust Property to the Mortgages
Trustee.
2.4 Trust Property
Subject to Clause 3, the Mortgages Trustee shall hold the Trust Property
as to both capital and income on trust absolutely for Funding (as to the
Funding Share) and for the Seller (as to the Seller Share) as tenants in
common upon, with and subject to all the trusts, powers and provisions of
this Deed.
3. CONDITIONS PRECEDENT
3.1 The Initial Trust Property is held by the Mortgages Trustee on the
Mortgages Trust.
3.2 The Initial Closing Trust Property shall be held by the Mortgages Trustee
on the Mortgages Trust upon the satisfaction of the following conditions
precedent:
(a) due execution and delivery of the Mortgage Sale Agreement by all
parties to it;
(b) due execution and delivery of this Deed by all parties to it; and
(c) payment by Funding to the Seller of the Initial Consideration.
3.3 Any Future Trust Property shall be held by the Mortgages Trustee on the
Mortgages Trust subject to satisfaction of the conditions set out in
Clause 4.1 of the Mortgage Sale Agreement for the transfer of New Loans
and their New Related Security to the Mortgages Trustee.
4. ACQUISITION BY FUNDING OF AN INCREASED INTEREST IN THE TRUST PROPERTY
4.1 Offer to assign and conditions to assignment
On not more than 60 nor less than 30 days' written notice, Funding may
offer to make a payment to the Seller to acquire an interest in the Trust
Property with the effect of increasing the Funding Share on the
Distribution Date specified in that notice. Such offer shall only be valid
if the following conditions precedent are satisfied on the Distribution
Date:
(a) the Principal Deficiency Ledger does not have a debit balance (which
remains outstanding) as at the most recent Interest Payment Date;
(b) no Note Event of Default or Intercompany Loan Event of Default shall
have occurred which is continuing or unwaived as at the relevant
Distribution Date;
(c) the Security Trustee is not aware that the proposed acquisition
would adversely affect the then current credit ratings by the Rating
Agencies (or any of them) of the Notes;
(d) the Notes have been issued by the relevant Issuer, the subscription
proceeds received on behalf of the relevant Issuer and advanced by
the relevant Issuer to Funding pursuant to an Intercompany Loan
Agreement, the proceeds of which will be applied by Funding to make
the payment referred to in the notice on the relevant Distribution
Date;
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(e) Funding has entered into, if necessary, a New Start-up Loan, a New
Variable Rate Swap, New Fixed Floating Rate Swap and a New Tracker
Rate Swap and adjustments have been made, if required, to the First
Reserve Fund and the Second Reserve Fund;
(f) receipt of a solvency certificate from the Seller in form and
content acceptable to the Mortgages Trustee, Funding and the
Security Trustee;
(g) as at the relevant Distribution Date, the aggregate Outstanding
Principal Balance of Loans constituting the Trust Property, in
respect of which the aggregate amount in arrear is more than three
times the monthly payment then due, is less than 5 per cent. of the
aggregate Outstanding Principal Balance of all Loans constituting
the Trust Property;
(h) unless otherwise agreed by ▇▇▇▇▇'▇, Standard and Poor's or Fitch, as
the case may be, the short term, unsecured, unguaranteed and
unsubordinated debt obligations of the Seller are rated at least P-1
by ▇▇▇▇▇'▇, A-1 by Standard and Poor's and F1 by Fitch at the time
of, and immediately following, the proposed acquisition;
(i) the product of the WAFF and WALS for the Loans constituting the
Trust Property calculated on the relevant Distribution Date in the
same way as for the Initial Portfolio (or as agreed by the Servicer
and the Rating Agencies from time to time) does not exceed the
product of the WAFF and WALS for the Loans constituting the Trust
Property calculated on the most recent previous Closing Date, plus
0.25 per cent.;
(j) the loan-to-value ratio of Loans in the Trust Property, after
application of the LTV Test on the relevant Distribution Date, does
not exceed the loan-to-value ratio (based on the LTV Test) of Loans
in the Trust Property on the most recent previous Closing Date plus
0.25 per cent.; and
(k) the First Reserve Fund and the Second Reserve Fund have not been
debited on or before the relevant Distribution Date for the purposes
of curing a Principal Deficiency in respect of the Term Advances in
circumstances where the First Reserve Fund or the Second Reserve
Fund (as applicable) has not been replenished by a corresponding
amount by the relevant Distribution Date.
Funding may not offer to make a payment to the Seller in consideration for
an increase in the Funding Share after any Interest Payment Date on which
any Issuer (including any New Issuer) does not exercise its option to
redeem the Notes or any New Notes issued by it pursuant to the Terms and
Conditions of such Notes or, as the case may be, any New Notes.
4.2 Completion of assignment
Subject to satisfaction of the conditions precedent set out in Clause 4.1
above and to acceptance of that offer by the Seller, Funding shall pay to
the Seller an amount equal to the increase in the Funding Share of the
Trust Property and the Funding Share of the Trust Property shall increase
by a corresponding amount, and the Seller Share shall decrease by the same
amount.
4.3 Audit of Loans constituting the Trust Property
If the short term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller fall below A-1 by Standard & Poor's, P-1 by
▇▇▇▇▇'▇ and/or F1 by Fitch, then the Beneficiaries shall appoint a firm of
independent auditors (approved by the Rating Agencies)
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to determine whether the Loans and their Related Security (or any part of
them) constituting the Trust Property complied with the representations
and warranties set out in Schedule 1 of the Mortgage Sale Agreement as at
the date such Loans were assigned to the Mortgages Trustee. The costs of
such independent auditors shall be borne by the Beneficiaries pro rata
according to their respective current percentage shares in the Trust
Property.
4.4 Tax
(a) Any payment by Funding to the Seller to acquire an interest in the Trust
Property shall be inclusive of any amount in respect of applicable value
added tax (if any); and
(b) Any stamp duty or stamp duty reserve tax in respect of any acquisition of
Trust Property shall be payable by the Seller.
5. ACQUISITION BY SELLER OF AN INTEREST RELATING TO CAPITALISED INTEREST
5.1 Any increase in the Outstanding Principal Balance due to Capitalised
Interest will be allocated to the Funding Share of the Trust Property and
to the Seller Share of the Trust Property, based on respectively the
Funding Share Percentage and the Seller Share Percentage in the Trust
Property as calculated on the previous Distribution Date.
5.2 Prior to an Insolvency Event occurring in respect of the Seller, on each
Distribution Date the Seller shall make a cash payment to Funding in an
amount equal to Funding's share of the Capitalised Interest arising since
the last Distribution Date in respect of those Loans that are subject to
Payment Holidays or Underpayments. In consideration for the making of such
payment the Seller Share of the Trust Property will increase by an amount
equal to the amount paid to Funding for Funding's share of the Capitalised
Interest, and the Funding Share will decrease by a corresponding amount.
The cash payment shall be made in accordance with Clause 5.4 below.
[To consider if this should apply in case of Flexible Plus loans Payment
Holidays/Underpayments funded from savings acounts see clause 17.2 of
flexible plus conditions]
5.3 If an Insolvency Event occurs in respect of the Seller, then the Seller
may make payment to Funding in respect of its share of the Capitalised
Interest in the same manner as is contemplated in Clause 5.2, but it is
not obliged to do so.
5.4 In respect of the cash payment to be made by the Seller pursuant to Clause
5.2, the Seller hereby directs the Mortgages Trustee to deduct from the
Seller's share of the Mortgages Trust Available Revenue Receipts
(allocated to the Seller pursuant to Clause 10.2 of this Deed) an amount
equal to such cash payment and to pay the same to Funding in satisfaction
of the Seller's obligations under Clause 5.2. To the extent that the
Seller's share of the Mortgages Trust Available Revenue Receipts is less
than the amount required to be paid by it pursuant to Clause 5.2, then the
Seller shall pay an amount equal to the shortfall directly to Funding from
its own resources.
5.5 Any payment by the Seller pursuant to Clause 5.2 shall be exclusive of any
amount in respect of applicable value added tax (which shall be paid by
the Seller in addition to payments made pursuant to Clause 5.2).
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6. PAYMENT BY THE SELLER TO FUNDING OF THE AMOUNT OUTSTANDING UNDER AN
INTERCOMPANY LOAN
6.1 Conditions precedent to acceptance of offer
Funding may accept any offer by the Seller to pay the amount outstanding
under any Series of Term Advances under an Intercompany Loan, but only if:
(a) either:
(i) the Outstanding Principal Balance of the relevant Series of
Term Advances under the Intercompany Loan is less than 10 per
cent. of the Outstanding Principal Balance of the Term
Advances of that Series immediately after the Term Advances
were drawn; or
(ii) (A) an Issuer would be required to deduct or withhold from any
payment of principal or interest or any other amount under any
of the Issuer Notes any amount for or on account of any
present or future taxes, duties, assessments or governmental
charges of whatever nature, or (B) Funding would be required
to deduct or withhold from amounts due under an Intercompany
Loan any amount on account of any present or future taxes,
duties, assessments or governmental charges of whatever
nature, and that Issuer is not able to arrange the
substitution of a company incorporated in another jurisdiction
approved by the relevant Note Trustee as principal debtor
under the relevant Notes and as lender under the relevant
Issuer Intercompany Loan Agreement, as the case may be; or
(iii) an Issuer has delivered a certificate to Funding, the relevant
Issuer Security Trustee and the Rating Agencies to the effect
that it would be unlawful for that Issuer to make, fund or
allow to remain outstanding a Term Advance made by it under
the relevant Intercompany Loan Agreement and stating that that
Issuer requires Funding to prepay the Term Advance; or
(iv) (in relation to the Seventh Issuer Intercompany Loans and
Eighth Issuer Intercompany Loans only) the new Basel Capital
Accord (as described in the consultative document "The New
Basel Capital Accord" published in April 2003 by the Basel
Committee on Banking Supervision) has been implemented in the
United Kingdom, whether by the rule of law, recommendation of
best practices or by any other regulation, no Seventh Issuer
Note Enforcement Notice or Eighth Issuer Note Enforcement
Notice has been served, the offer by the Seller is made on or
after the Interest Payment Date falling in April 2007 and the
Seller has given not more than 60 days, and not less than 30
days, notice of making an offer;
(b) the Security Trustee has received written confirmation from each of
the Rating Agencies that there would not be any adverse effect on
the then current ratings of the Notes if Funding accepted the offer;
(c) Funding would receive the payment from the Seller on a Distribution
Date (together with VAT, if payable); and
(d) Funding will, and is entitled under the terms of that Intercompany
Loan to, apply the proceeds of the payment to repay the relevant
Series of Term Advances under that Intercompany Loan and the
relevant Issuer has confirmed to Funding that on the next
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succeeding Funding Interest Payment Date it will use the proceeds of
the relevant payment to repay the corresponding classes of Notes and
that Issuer has exercised its option to redeem the corresponding
classes of Notes.
6.2 Adjustment to shares if offer accepted
If Funding accepts the offer as described in Clause 6.1 above, then the
Funding Share of the Trust Property shall decrease by an amount
corresponding to the amount paid by the Seller and the Seller Share of the
Trust Property shall increase by the same amount.
7. INITIAL FUNDING SHARE AND INITIAL SELLER SHARE
7.1 Initial Funding Share
The Initial Funding Share of the Trust Property was (pound)35.25 at 25th
July, 2000 and (pound)2,256,000,035.25 at the Initial Closing Date and the
Initial Funding Share Percentage was the Initial Funding Share expressed
as a percentage of the Trust Property at such date, that is to say, 35.25
per cent.
7.2 Initial Seller Share
The Initial Seller Share of the Trust Property was the sum which remains
of the Trust Property after deduction of the Initial Funding Share. As at
25th July, 2000, the Initial Seller Share was (pound)64.75 and the Initial
Seller Share Percentage was equal to 100 per cent. minus the Initial
Funding Share Percentage, that is to say, 64.75 per cent. The amount of
the Initial Seller Share and the Initial Seller Share Percentage on the
Initial Closing was determined immediately after the Initial Closing Date.
7.3 Rounding of percentage shares
Except for the Initial Closing Date (and unless otherwise agreed by the
Beneficiaries), the Funding Share Percentage and the Seller Share
Percentage shall be calculated to five decimal places.
8. ADJUSTMENT OF FUNDING SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE ON
DISTRIBUTION DATES
8.1 Distribution
On each Distribution Date, excluding for the avoidance of doubt, the
Initial Closing Date, the Funding Share Percentage and the Seller Share
Percentage will be recalculated by the Cash Manager (on behalf of the
Mortgages Trustee and the Beneficiaries) based on the aggregate
Outstanding Principal Balance of the Loans constituting the Trust Property
(as adjusted from time to time) on the second London Business Day
immediately preceding that Distribution Date. On each Distribution Date,
the Mortgages Trustee will distribute Revenue Receipts and Principal
Receipts in accordance with Clauses 10 and 11 hereof.
8.2 Current Funding Share Percentage
On each Distribution Date and the date when the Mortgages Trust terminates
(in each case the Relevant Distribution Date), the Current Funding Share
Percentage will be an amount, expressed as a percentage (calculated to an
accuracy of three decimal places (rounded upwards)), equal to:
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A - B - C + D + E + F
--------------------- X 100
G
where:
A = the Current Funding Share as at the immediately preceding
Distribution Date (or, in the case of the first Distribution Date,
the Initial Funding Share as at the Initial Closing Date);
B = the amount of any Principal Receipts distributed to Funding on that
Relevant Distribution Date in accordance with the provisions
described in Clause 11 below;
C = the amount of any Losses sustained on the Loans in the period from
the last Distribution Date and ending on the Relevant Distribution
Date and allocated to Funding (based on the Funding Share Percentage
thereof calculated on the immediately preceding Distribution Date
or, in the case of the first Distribution Date, the Initial Funding
Share Percentage) in the Distribution Period ending on the Relevant
Distribution Date;
D = an amount equal to any consideration (excluding Deferred
Consideration) paid by Funding to the Seller in relation to any New
Loans assigned to the Mortgages Trustee on the Relevant Distribution
Date;
E = an amount equal to any consideration (excluding Deferred
Consideration) paid by Funding to the Seller in relation to any
acquisition by Funding from the Seller on the Relevant Distribution
Date of an interest in the Trust Property;
F = an amount equal to the portion of any Capitalised Interest accrued
on the Loans in the Distribution Period ending on the Relevant
Distribution Date which is allocated to the Funding Share in
accordance with Clause 5.1 less the amount of any payment made by
Seller to Funding pursuant to Clauses 5.2 or 5.3 as the case may be,
in respect of such portion of Capitalised Interest; and
G = the amount of the Retained Principal Receipts (if any) plus the
aggregate Outstanding Principal Balance of all the Loans
constituting the Trust Property as at the Relevant Distribution Date
after making the distributions, allocations and additions referred
to in (B), (C), (D), (E) and (F) above, and after taking account of
(i) any distributions of Principal Receipts to Funding and the
Seller; (ii) the amount of any Losses allocated to Funding and the
Seller; (iii) any increase in the Loan balances due to Borrowers
taking Payment Holidays or making Underpayments under Flexible
Loans; (iv) the adjustments referred to paragraphs 8.4(a) to 8.4(e)
(inclusive) below; and (v) the amount of any other additions or
subtractions to the Trust Property.
8.3 Current Funding Share
The Current Funding Share will be an amount equal to:
A - B - C + D + E + F
where "A", "B", "C", "D", "E" and "F" have the meanings specified in
Clause 8.2 above.
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8.4 Adjustments to Trust Property
On each Relevant Distribution Date the aggregate Outstanding Principal
Balance of the Loans constituting the Trust Property shall be reduced or,
as the case may be, deemed to be reduced for the purposes of the
calculation set out in "G" above, if any of the following events has
occurred in the Distribution Period ending on the Relevant Distribution
Date:
(a) any Borrower exercises a right of set-off in relation to Loans
constituting part of the Trust Property so that the amount of
principal and/or interest owing under a loan is reduced but no
corresponding amount is received by the Mortgages Trustee; in which
event the total amount of Trust Property shall be reduced by an
amount equal to the amount set-off; and/or
(b) a Loan or (as applicable) its Related Security (i) does not comply
with the Loan Warranties in the Mortgage Sale Agreement or (ii) is
the subject of a Product Switch or a Further Advance or other
obligation of the Seller to repurchase (including, for the avoidance
of doubt, any obligation to repurchase pursuant to Clause 7.4 of the
Mortgage Sale Agreement), and if the Seller fails to repurchase the
Loan or Loans under the relevant Mortgage Account and their Related
Security as required by the terms of the Mortgage Sale Agreement,
then the Trust Property shall be deemed to be reduced for the
purposes of the calculation in "G" above by an amount equal to the
Outstanding Principal Balance of the relevant Loan or Loans under
the relevant Mortgage Account together with Arrears of Interest and
Accrued Interest; and/or
(c) the Seller would be required to repurchase a Loan and its Related
Security in accordance with the terms of the Mortgage Sale
Agreement, but such Loan and its Related Security are not capable of
repurchase, in which case the Trust Property shall be deemed to be
reduced for the purposes of the calculation in "G" above by an
amount equal to the Outstanding Principal Balance of the relevant
Loan or Loans under the relevant Mortgage Account together with
Arrears of Interest and Accrued Interest; and/or
(d) the Seller materially breaches any other obligation or warranty
under the Mortgage Sale Agreement and/or (for so long as it is the
Servicer) the Servicing Agreement, which is also grounds for
terminating the appointment of the Servicer in which event the
aggregate Outstanding Principal Balance of Loans constituting the
Trust Property shall be deemed for the purposes of the calculation
in "G" above to be reduced by an amount equivalent to all losses,
costs, liabilities, claims, expenses and damages incurred by the
Beneficiaries as a result of such breach; and/or
(e) the Seller Share of Mortgages Trustee Revenue Receipts is less than
the Loss Amount (as defined in Clause 10.3) payable to the Mortgages
Trustee and/or Funding in accordance with Clause 10.3, in which case
the Trust Property shall be deemed to be reduced for the purposes of
the calculation in "G" above by an amount equal to the shortfall in
the Loss Amount.
The reductions and deemed reductions set out in paragraphs 8.4(a), 8.4(b),
8.4(c), 8.4(d) and 8.4(e) above shall be made to the Seller Share only of
the Trust Property (or for the purposes of calculating the Seller Share of
the Trust Property as the case may be) until the Seller Share is zero. If
at, or any time after the Initial Closing Date the Mortgages Trustees
holds, or there is held to its order, or it receives, or there is received
to its order, any property, interest, right or benefit relating to any
Loan and its Related Security which is or has been subject to any matter
described in Clause 8.4(a) the Mortgages Trustee will remit, assign or
transfer the
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same to the Seller, as the case may require, and until it does so or to
the extent that the Mortgage Trustee is unable to effect such remittance,
assignment or transfer, the Mortgages Trustee will hold such property,
interest, right or benefit and/or the proceeds thereof upon trust
absolutely for the Seller (separate from the Mortgages Trust).
8.5 Current Seller Share Percentage
On each Distribution Date, the Current Seller Share Percentage will be an
amount equal to:
100% - Current Funding Share Percentage.
8.6 Current Seller Share
The Current Seller Share will be an amount equal to:
The total amount of Trust Property - Current Funding Share.
8.7 Funding Share/Seller Share
Neither the Funding Share nor the Seller Share may be reduced below zero.
At all times the Funding Share Percentage and the Seller Share Percentage
shall be equal to 100 per cent. of the Trust Property.
9. MINIMUM SELLER SHARE
9.1 Initial Minimum Seller Share
The Seller Share of the Trust Property includes an amount equal to the
Minimum Seller Share. Unless and until the Funding Share of the Trust
Property is in an amount equal to zero or an Asset Trigger Event occurs,
the Seller will not be entitled to receive Principal Receipts which would
reduce the Seller Share of the Trust Property to an amount less than the
Minimum Seller Share and the Seller consents and directs the Mortgages
Trustee accordingly.
9.2 Fluctuation of Minimum Seller Share on each Distribution Date
On and from the Eighth Issuer Closing Date, the amount of the Minimum
Seller Share will be recalculated on each Distribution Date in accordance
with the following formula:
W + X + Y + Z
where:
W = [100% of the aggregate cleared balances of all savings accounts
opened in respect of flexible plus loans];
X = 4.0% of the aggregate Outstanding Principal Balance of all Loans
comprised in the Trust Property;
Y = the product of: (p x q) x r where:
p = 8%;
q = the Flexible Draw Capacity, being an amount equal to the
excess of (i) the maximum amount that Borrowers are entitled
to draw under Flexible Loans
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included in the Trust Property (whether or not drawn) over
(ii) the aggregate principal balance of actual Flexible Loan
advances made to Borrowers in the Trust Property on the
relevant Distribution Date (but excluding the Initial Advances
made thereunder); and
r = 3; and
Z = the aggregate sum of the reductions or deemed reductions made to the
Seller Share pursuant to Clauses 8.4(b), 8.4(c), 8.4(d) and 8.4(a)
on that Distribution Date.
9.3 Recalculation of Minimum Seller Share following occurrence of exceptional
events
The calculation of the Minimum Seller Share in accordance with Clause 9.2
above will be recalculated with the agreement of the parties hereto, the
Security Trustee and the Rating Agencies if either (i) the Seller merges
or otherwise combines its business with another bank or other financial
institution so as to increase the risks associated with Borrowers holding
deposits in Abbey accounts or (ii) the aggregate amount of the obligations
to pay Delayed Cashbacks constitutes more than 1 per cent. of the value of
the Trust Property.
10. ALLOCATION AND DISTRIBUTION OF REVENUE RECEIPTS
10.1 Allocation and Distribution of Third Party Amounts
Pursuant to the Cash Management Agreement, the Cash Manager (at the
direction of the Mortgages Trustee on behalf of the Beneficiaries at their
direction and with their consent) will deduct, as and when identified,
Third Party Amounts from the Revenue Receipts standing to the credit of
the Mortgages Trustee GIC Account, and pay over the same to the proper
recipients thereof. The Mortgages Trustee and the Beneficiaries hereby
consent to such deductions.
10.2 Allocation and Distribution of Mortgages Trustee Available Revenue
Receipts
On each Distribution Date the Cash Manager (at the direction of the
Mortgages Trustee and on behalf of the Beneficiaries at their direction
and with their consent) will distribute Mortgages Trustee Available
Revenue Receipts as follows:
(a) firstly, in or towards satisfaction pro rata according to the
respective amounts thereof of:
(i) any costs, charges, liabilities and expenses then due or to
become due to the Mortgages Trustee under the provisions of
this Deed together with VAT thereon as provided herein (if
payable); and
(ii) any amounts due and payable by the Mortgages Trustee to third
parties in respect of the Mortgages Trust and incurred without
breach by the Mortgages Trustee of the documents to which it
is a party (and for which payment has not been provided for
elsewhere), including amounts due to H.M Customs and Excise
and/or to the Inland Revenue or any other taxation authority
which has jurisdiction over the Trust Property or the
Mortgages Trustee in respect of any stamp, issue,
registration, documentary and other fees, duties and taxes
(including interest and penalties) payable by the Mortgages
Trustee in connection with (i) the execution and delivery of
this Deed; (ii) any action to be taken by or on behalf of the
Mortgages Trustee to enforce or to resolve any doubt
concerning or, for any other purpose in relation to, the
Mortgages
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Trust Deed; and (iii) any such tax which is primarily due from
either or both of Abbey and Funding in their capacities as
Beneficiaries (and, for the avoidance of doubt, only in such
capacities) in circumstances where the Mortgages Trustee has
made a payment of such tax (or part thereof) by reason of a
failure by Abbey or Funding to discharge their primary
liability in respect of such tax;
(b) secondly, in or towards satisfaction of any remuneration then due
and payable to the Servicer and any costs, charges, liabilities and
expenses then due or to become due to the Servicer under the
provisions of the Servicing Agreement, together with VAT thereon as
provided therein; and
(c) thirdly, subject to Clause 10.3 below, to pay Funding and the Seller
the Funding Share and the Seller Share respectively of any remaining
Mortgages Trustee Available Revenue Receipts, calculated by
multiplying the total amount of such remaining Mortgages Trustee
Available Revenue Receipts by the Current Funding Share Percentage
(calculated on the immediately preceding Distribution Date), which
product shall be allocated to Funding, and the remaining Mortgages
Trustee Available Revenue Receipts which shall be allocated to the
Seller (subject to deducting any amounts due to the Mortgages
Trustee and/or Funding by way of set-off pursuant to Clause 7.3 of
the Mortgage Sale Agreement).
10.3 If, as a result of any of the matters referred to in paragraphs (a) to (g)
inclusive of Clause 7.4 of the Mortgage Sale Agreement, the Mortgages
Trustee and/or Funding suffers or incurs any costs, expenses, losses or
other claims in connection with any recovery of interest on the Loans to
which the Seller, the Mortgages Trustee or Funding was not entitled or
could not enforce (referred to in this Clause 10.3 as the Loss Amount),
then:
(a) the Seller Share of Mortgages Trustee Revenue Receipts shall be
reduced by an amount equal to the Loss Amount; and
(b) from the amount deducted from the Seller Share of the Mortgages
Trustee Revenue Receipts referred to in paragraph (a) above:
(i) an amount will be paid to the Mortgages Trustee equal to the
Loss Amount incurred by the Mortgages Trustee; and
(ii) an amount will be paid to Funding equal to the Loss Amount
incurred by Funding.
11. ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS
11.1 Calculation of Principal Receipts:
On each Relevant Distribution Date, prior to distributing Principal
Receipts, the Cash Manager shall ascertain:
(a) the amount of Mortgages Trust Available Principal Receipts:
(b) whether the Cash Accumulation Period has started or would start
during the immediately succeeding Distribution Period in respect of
any Bullet Term Advance or in the case of the Eighth Issuer Series 1
Term AAA Advance, any applicable Quarterly Cash Amount (the Cash
Accumulation Period being calculated separately
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for each Bullet Term Advance or in the case of the Eighth Issuer
Series 1 Term AAA Advance, each Quarterly Cash Amount);
(c) whether amounts are outstanding in respect of any Pass-Through Term
Advances or Scheduled Amortisation Term Advances that are then due
and payable; and
(d) whether the Scheduled Amortisation Period has started or would start
during the immediately succeeding Distribution Period in respect of
any Scheduled Amortisation Term Advance.
11.2 Allocation and Distribution of Principal Receipts prior to the occurrence
of a Trigger Event
Prior to the occurrence of a Trigger Event, on each Distribution Date, the
Cash Manager (at the direction of the Mortgages Trustee acting on behalf
of the Beneficiaries at their direction and with their consent) shall
apply Principal Receipts as provided in this Clause 11:
(a) (subject to the terms of paragraphs (b), (c), (d), (e) and (f)
below), all Principal Receipts shall be paid to the Seller until the
Seller Share of the Trust Property is equal to the Minimum Seller
Share (as determined on the previous Distribution Date);
(b) to allocate and distribute to Funding an amount equal to the
aggregate of the amounts required by Funding (i) to repay the
Funding Liquidity Provider in respect of amounts drawn under the
Funding Liquidity Facility, (ii) to replenish the First Reserve Fund
to the extent that amounts have been drawn from the First Reserve
Fund to make scheduled repayments of principal under any
Intercompany Loan and (iii) to the extent that there is a shortfall
in the Funding Liquidity Reserve Fund Required Amount, an amount
equal to the shortfall required to be paid by Funding into the
Funding Liquidity Reserve Fund;
(c) after making the distributions in (b) above from and including the
start of a Cash Accumulation Period, all Principal Receipts shall be
allocated and distributed to Funding (but only to the extent that
such payments shall not cause the Funding Share of the Trust
Property to fall below zero) until an amount equal to the relevant
Bullet Amount or in the case of the Eighth Issuer Series 1 Term AAA
Advance, each applicable Quarterly Cash Amount has been or will have
been accumulated by Funding, as shown on the Cash Accumulation
Ledger, and in the case of the Eighth Issuer Series 1 Term AAA
Advance, on the Cash Accumulation Sub-Ledger;
(d) after making the distributions in (b) and (c) above, the Cash
Manager on behalf of the Mortgages Trustee shall allocate and
distribute Principal Receipts to Funding in an amount equal to the
Scheduled Amortisation Amount due on the relevant Scheduled
Amortisation Term Advance on the immediately succeeding Interest
Payment Date (but only to the extent that such payments shall not
cause the Funding Share of the Trust Property to fall below zero);
(e) after making the distributions in (b), (c) and (d) above, from and
including the date when amounts amounts are or will become
outstanding on the next following Interest Payment Date in respect
of one or more Pass-Through Term Advances that are due and payable
(the Payable Pass-Through Term Advances) under an Intercompany Loan
ignoring for these purposes the deferral of repayment of any Term
BBB Advance, any Term A Advance and any Term AA Advance, then the
aggregate amount of the following amounts in respect of each
Intercompany Loan under which such Payable Pass-Through Term
Advances arise shall be allocated and distributed to
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Funding until all of such Payable Pass-Through Term Advances are
fully repaid or will on the next following Interest Payment Date be
fully repaid. The amounts referred to above shall be determined in
respect of each Intercompany Loan Agreement advanced by any Issuer
to Funding which then comprises a Payable Pass-Through Term Advance
(Intercompany Loan Agreement X) and shall be:
(i) prior to the occurrence of any option to redeem the Notes or
any New Notes issued by the Issuer (which would include a New
Issuer) which is the lender of such Intercompany Loan
Agreement X, the Outstanding Principal Balance of each Payable
Pass-Through Term Advance forming part of such Intercompany
Loan Agreement X; and
(ii) after the occurrence of any option to redeem the Notes
(including any New Notes) issued by the Issuer (which would
include a New Issuer) which is the lender of such Intercompany
Loan Agreement X, an amount calculated as follows:
Funding Share x Principal x Outstanding Principal Balance of
Percentage Receipts Intercompany Loan Agreement X
---------------------------------
Aggregate Outstanding Principal
Balance of all outstanding
Intercompany Loans,
(but in each case taking into account any amounts available to
Funding in the Funding Principal Ledger to make such payments)
provided that distributions shall only be made to the extent
that such payments shall not cause the Funding Share of the
Trust Property to fall below zero; and
(f) after making the distributions in (b), (c), (d) and (e), if such
Distribution Date is a Seller Share Event Distribution Date, then
the Cash Manager shall deposit such excess Principal Receipts (the
Retained Principal Receipts) in the Mortgages Trustee GIC Account
and make a corresponding credit to the Principal Ledger.
11.3 Allocation and Distribution of Principal Receipts following the occurrence
of an Asset Trigger Event
After the occurrence of an Asset Trigger Event, all Principal Receipts and
any Retained Principal Receipts will be distributed by the Cash Manager as
follows:
(a) if the immediately preceding Distribution Date was a Seller Share
Event Distribution Date, all of the Retained Principal Receipts to
Funding until the Funding Share of the Trust Property is zero; and
then
(b) pro rata and pari passu between Funding and the Seller according to
the Current Funding Share Percentage of the Trust Property and the
Current Seller Share Percentage of the Trust Property respectively
(and, for the avoidance of doubt, such payments may reduce the
Current Seller Share to an amount less than the Minimum Seller
Share) until the Funding Share of the Trust Property is zero.
When the Funding Share of the Trust Property is zero, the remaining
Principal Receipts (if any) will be allocated to the Seller.
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11.4 Allocation and Distribution of Principal Receipts following the occurrence
of a Non-Asset Trigger Event
After the occurrence of a Non-Asset Trigger Event (where an Asset Trigger
Event has not occurred), all Principal Receipts and any Retained Principal
Receipts will be paid to Funding until the Funding Share of the Trust
Property is zero and will thereafter be paid to the Seller.
11.5 Allocation and Distribution of Principal Receipts following entry by
Funding into a New Term Advance
If a New Issuer makes a New Term Advance to Funding pursuant to a New
Intercompany Loan Agreement, then the parties hereto shall amend the terms
of Clause 11 as required to reflect the repayment provisions of that New
Term Advance. If (with the consent of the Seller and Funding) a New Issuer
acquires a direct interest in the Trust Property, the parties hereto shall
amend the terms of this Deed as required to reflect such acquisition by
the New Issuer. For the avoidance of doubt, in either case, the parties
hereto shall amend the terms of the Trigger Events if required to do so by
the Rating Agencies as a result of the New Issue.
12. ALLOCATION OF LOSSES
Subject as provided herein (and in particular, Clause 8), all Losses
sustained on the Loans during a Distribution Period shall be applied in
reducing pro rata both the Funding Share and the Seller Share on each
Relevant Distribution Date by multiplying the Losses in the relevant
Distribution Period by the Current Funding Share Percentage, (as
calculated on the immediately preceding Distribution Date), the product of
which shall be allocated to Funding (until the Funding Share is zero), and
the remainder of such Losses shall be allocated to the Seller.
13. LEDGERS
The Mortgages Trustee shall maintain, or shall procure that there are
maintained, the following Mortgages Trustee Ledgers:
(a) the Principal Ledger, which shall record all receipts of Principal
Receipts and Retained Principal Receipts and distribution of the
same to Funding and the Seller;
(b) the Revenue Ledger, which shall record all receipts of Revenue
Receipts and distribution of the same to Funding and the Seller;
(c) the Losses Ledger, which shall record Losses in relation to the
Loans; and
(d) the Funding Share/Seller Share Ledger which shall record the Current
Funding Share, the Current Seller Share of the Trust Property, the
Current Funding Share Percentage and the Current Seller Share
Percentage.
14. COSTS AND EXPENSES OF THE MORTGAGES TRUSTEE
The Mortgages Trustee shall be entitled to charge and be remunerated for
the work undertaken by it as trustee of the trusts created by this Deed.
The remuneration shall be on such terms (if any) as the Mortgages Trustee
may from time to time agree with the Seller and Funding in writing. In
default of such agreement, Funding and the Seller shall indemnify the
Mortgages Trustee from time to time with such regularity as is reasonably
agreed between the parties, of the documentable costs and expenses
directly and properly incurred by the Mortgages Trustee in performing its
obligations hereunder together with any amounts in
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respect of Irrecoverable VAT incurred in respect of such costs and
expenses. The cost of such indemnity shall be paid in accordance with the
priority of payments set out in Clause 10.2 of this Deed.
15. DIRECTIONS FROM BENEFICIARIES
15.1 Servicing Agreement and Cash Management Agreement
On the Initial Closing Date the Mortgages Trustee shall enter into the
Servicing Agreement and the Cash Management Agreement.
15.2 Directions from Beneficiaries
Subject to Clause 15.3 below, the Mortgages Trustee covenants with the
Seller and Funding that the Mortgages Trustee shall take all necessary
steps and do everything which both Funding and the Seller (acting
together) may reasonably request or direct it to do in order to give
effect to the terms of this Deed or the other Transaction Documents to
which the Mortgages Trustee is a party.
15.3 Funding and the Seller covenant with each other that neither shall direct
or request the Mortgages Trustee to do any act or thing which breaches the
terms of, or is otherwise expressly dealt with (such that the Mortgages
Trustee has no discretion) by, any of the Transaction Documents.
15.4 No requirement to act
The Mortgages Trustee will not be bound and shall have no power to take
any proceedings, actions or steps under or in connection with any of this
Deed or the other Transaction Documents to which it is a party unless:
(a) it shall have been directed to do so by the Beneficiaries or it is
required to do so under any express provision of this Deed or the
other Transaction Documents (but subject to Clause 15.2 in respect
of conflict of directions); and
(b) it shall have been indemnified to its satisfaction against all
liabilities, proceedings, claims and demands to which it may be or
become liable and all costs, charges and expenses which may be
incurred by it in connection therewith and the terms of such
indemnity may include the provision of a fighting fund, non-recourse
loan or other similar arrangement.
15.5 Covenant of the Mortgages Trustee
Subject to Clause 15.2, the Mortgages Trustee covenants with each of the
Seller and Funding to exercise all of its rights arising under the Trust
Property (including without limitation any rights of enforcement) for the
benefit of and on behalf of the Beneficiaries.
16. EARLY TERMINATION OF THE MORTGAGES TRUST
On giving not more than 61 nor less than 31 days' notice to Funding, the
Seller may pay to Funding the Termination Price if the aggregate
Outstanding Principal Balance under all Intercompany Loan Agreements is at
any time less than 10 per cent. of the aggregate Outstanding Principal
Balance of all Intercompany Loan Agreements as at the respective drawdown
dates thereof. Thereafter, the Mortgages Trustee shall hold the Trust
Property for the Seller absolutely, freed and released from the Mortgages
Trust.
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17. TRANSFERS
17.1 Funding shall not assign
Subject to the right of Funding (or the Security Trustee or a Receiver on
its behalf) to sell the Funding Share of the Trust Property following the
service of an Intercompany Loan Enforcement Notice (which right is hereby
conferred), Funding covenants with the Seller that it shall not, and shall
not purport to, sell, assign, transfer, convey, charge, declare a trust
over, create any beneficial interest in, or otherwise dispose of the
Funding Share in the Trust Property, or any of Funding's rights, title and
interest or benefit in any of the Portfolio or the Trust Property to a
third party, other than pursuant to the terms of the Transaction Documents
(including for the avoidance of doubt, the Funding Deed of Charge).
17.2 Seller shall not assign
The Seller covenants with Funding that it shall not, and shall not purport
to, sell, assign, transfer, convey, charge, declare a trust over, create
any beneficial interest in, or otherwise dispose of the Seller Share in
the Trust Property or any of the Seller's rights, title and interest or
benefit in the Trust Property to a third party, other than pursuant to the
terms of the Transaction Documents.
18. COVENANTS OF THE MORTGAGES TRUSTEE
Save with the prior written consent of the Beneficiaries or as provided in
or envisaged by this Deed and the other Transaction Documents to which the
Mortgages Trustee is a party, the Mortgages Trustee shall not, so long as
it is acting as Mortgages Trustee hereunder:
(a) Negative Pledge
create or permit to subsist any mortgage, standard security, pledge,
lien, charge or other security interest whatsoever (unless arising
by operation of law), upon the whole or any part of its assets
(including any uncalled capital) or its undertakings, present or
future;
(b) Disposal of Assets
transfer, sell, lend, part with or otherwise dispose of, or deal
with, or grant any option or present or future right to acquire any
of its assets or undertakings or any interest, estate, right, title
or benefit therein or thereto or agree or attempt or purport to do
so;
(c) Equitable Interest
permit any person other than the Beneficiaries to have any equitable
or beneficial interest in any of its assets or undertakings or any
interest, estate, right, title or benefit therein;
(d) Bank Accounts
have an interest in any bank account, other than as set out in the
Transaction Documents;
17
(e) Restrictions on Activities
carry on any business other than as described in this Deed and the
Mortgage Sale Agreement;
(f) Borrowings
incur any indebtedness in respect of borrowed money whatsoever or
give any guarantee or indemnity in respect of any such indebtedness;
(g) Merger
consolidate or merge with any other person or convey or transfer its
properties or assets substantially as an entirety to any other
person;
(h) Employees or premises
have any employees or premises or subsidiaries;
(i) Further shares
issue any further shares; or
(j) United States activities
engage in any activities in the United States (directly or through
agents) or derive any income from United States sources as
determined under United States income tax principles or hold any
property if doing so would cause it to be engaged or deemed to be
engaged in a trade or business within the United States as
determined under United States tax principles.
19. POWER TO DELEGATE
19.1 Power to delegate
Subject to Clause 19.2, the Mortgages Trustee may (notwithstanding any
rule of law or equity to the contrary) delegate (revocably or irrevocably
and for a limited or unlimited period of time) the performance of all or
any of its obligations and the exercise of all or any of its powers under
this Deed or imposed or conferred on it by law or otherwise to any person
or body of persons fluctuating in number selected by it and any such
delegation may be by power of attorney or in such other manner as the
Mortgages Trustee may think fit and may be made upon such terms and
conditions (including the power to sub-delegate) as the Mortgages Trustee
may think fit.
19.2 No further appointments
Notwithstanding the provisions of Clause 19.1, the Mortgages Trustee shall
not appoint any agent, attorney or other delegate having power to act in
respect of the Trust Property unless it is directed in writing to do so by
the Beneficiaries. The appointment of any agent, attorney or other
delegate hereunder above shall terminate immediately upon the occurrence
of a Trigger Event.
20. POWERS OF INVESTMENT
Save as expressly provided for in this Deed, the Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement, the
Mortgages Trustee shall have no further or
18
other powers of investment with respect to the Trust Property and neither
the Trustee Investments Act 1961 nor any other provision relating to
trustee powers of investment implied by statute or general law shall apply
to the Mortgages Trust and, for the avoidance of doubt, the statutory
power to accumulate income conferred on trustees by Section 31 of the
Trustee Act 1925 is expressly excluded.
21. OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE
21.1 No action to impair Trust Property
Except for actions expressly authorised by this Deed, the Mortgages
Trustee shall take no action reasonably likely to impair the interests of
the Beneficiaries in any Trust Property now existing or hereafter created
or to impair the value of any Loan or its Related Security subject to the
Mortgages Trust.
21.2 Litigation
The Mortgages Trustee must not prosecute or defend any legal or other
proceedings anywhere in the world (at the cost of the Trust Property)
unless it obtains legal or other advice that it is in the interests of the
Beneficiaries to do so.
21.3 No Implied Duties
The duties and obligations of the Mortgages Trustee under the Mortgages
Trust shall be determined solely by the express provisions of this Deed
(but without prejudice to the duties and obligations of the Mortgages
Trustee under any of the other Transaction Documents). The Mortgages
Trustee shall not be liable under this Deed except for the performance of
such duties and obligations as shall be specifically set forth in this
Deed. No implied covenants or obligations shall be read into this Deed
against the Mortgages Trustee, and the permissible right of the Mortgages
Trustee to do things set out in this Deed shall not be construed as a
duty.
21.4 No Liability
Neither the Mortgages Trustee, Funding (in its capacity as a Beneficiary
hereunder) nor the Seller (in its capacity as a Beneficiary hereunder)
shall be liable to each other, in the absence of wilful default,
negligence or breach of the terms of this Deed, in respect of any loss or
damage which arises out of the exercise or attempted or purported exercise
or failure to exercise any of their respective powers.
21.5 Reliance on Certificates
The Mortgages Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accordance with, any resolution, officer's
certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented to it pursuant to the Transaction Documents by
the proper party or parties.
21.6 Reliance on Third Parties
The Mortgages Trustee may, in relation to these presents, act on the
opinion or advice of or a certificate or any information obtained from any
lawyer, banker, valuer, broker, accountant, financial adviser, securities
dealer, merchant bank, computer consultant or other expert in the United
Kingdom or elsewhere and shall not, provided that it shall not have acted
fraudulently
19
or in breach of any of the provisions of the Transaction Documents, be
responsible for any loss occasioned by so acting. Any such opinion,
advice, certificate or information may be sent or obtained by letter,
telemessage, telex, cable or facsimile device and the Mortgages Trustee
shall not be liable for acting on any opinion, advice, certificate or
information purporting to be so conveyed although the same shall contain
some error or shall not be authentic, provided that such error or lack of
authenticity shall not be manifest.
22. NO RETIREMENT OF MORTGAGES TRUSTEE
22.1 No Retirement
The Mortgages Trustee shall not, and shall not purport to, retire as the
trustee of the Mortgages Trust or appoint any additional trustee of the
Mortgages Trust and shall have no power to retire or appoint any
additional trustee under the Trustee ▇▇▇ ▇▇▇▇ or otherwise.
22.2 No Replacement
Neither the Seller nor Funding shall at any time remove or purport to
remove and/or replace the Mortgages Trustee as the trustee of the
Mortgages Trust.
22.3 No Termination
Prior to the payment by Funding of all amounts owing under the
Intercompany Loan Agreements and under the Transaction Documents, neither
the Seller nor Funding shall at any time, except in accordance with the
provisions of Clauses 16 and 23, terminate or purport to terminate the
Mortgages Trust and, in particular, but without prejudice to the
generality of the foregoing, the Seller and Funding shall not in reliance
on their absolute beneficial interests in the Trust Property call for the
transfer to them or vesting in them of the legal estate in all or any part
of the Trust Property.
23. TERMINATION
Subject to Clause 16, the Mortgages Trust shall terminate in respect of
the Trust Property (if any then remains) upon the date to occur of (i) the
date on which the Funding Share of the Trust Property is zero, and (ii)
any other date agreed in writing by Funding and the Seller.
24. FURTHER ASSURANCES
The parties agree that they will co-operate fully to do all such further
acts and things and execute any further documents as may be necessary or
desirable to give full effect to the arrangements contemplated by this
Deed.
25. AMENDMENTS, ETC.
25.1 Amendments and Waivers
Without prejudice to Clause 28 of the Funding Deed of Charge, no amendment
or waiver of any provision of this Deed nor consent to any departure by
any of the parties therefrom shall 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.
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25.2 Entire Agreement
This Deed contains a final and complete integration of all prior
expressions by the parties with respect to the subject matter of this Deed
and constitutes the entire agreement among the parties with respect to the
subject matter of this Deed superseding all prior oral or written
understandings other than the other Transaction Documents.
26. NON PETITION COVENANT
The Seller hereby agrees that it shall not institute against either
Funding or the Mortgages Trustee any winding-up, administration,
insolvency or similar proceedings so long as any sum is outstanding under
any Intercompany Loan Agreement and for one year plus one day since the
last day on which any such sum was outstanding.
27. NO PARTNERSHIP OR AGENCY
Nothing in this Deed shall be taken to constitute or create a partnership
between any of the parties to this Deed or to make or appoint the Seller
the agent of Funding (or vice versa).
28. CALCULATIONS
In the absence of manifest error, any determination or calculation or
performance by or on behalf of the Mortgages Trustee in connection with
the provisions of this Deed shall be deemed to be conclusive.
29. NO WAIVER; REMEDIES
No failure on the part of any party to this Deed to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy preclude any
other or further exercise thereof or the exercise of any other right or
remedy. The remedies in this Deed are cumulative and not exclusive of any
remedies provided by law.
30. EXECUTION IN COUNTERPARTS; SEVERABILITY
30.1 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.
30.2 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.
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31. CONFIDENTIALITY
31.1 General Obligation of Confidentiality
Unless otherwise required by applicable law, and subject to Clause 31.2
below, each of the parties agrees to maintain the confidentiality of this
Deed in its communications with third parties and otherwise. None of the
parties shall disclose to any person any information relating to the
business, finances or other matters of a confidential nature of or
relating to any other party to this Deed or any of the Transaction
Documents which it may have obtained as a result of having entered into
this Deed or otherwise.
31.2 Exceptions
The provisions of Clause 31.1 above shall not apply:
(a) to the disclosure of any information to any person who is a party to
any of the Transaction Documents as expressly permitted by the
Transaction Documents;
(b) to the disclosure of any information which is or becomes public
knowledge otherwise than as a result of the wrongful conduct of the
recipient;
(c) to the extent that the recipient is required to disclose the same
pursuant to any law or order of any court or pursuant to any
direction or requirement (whether or not having the force of law) of
any central bank or any governmental or other regulatory or Taxation
authority;
(d) to the disclosure of any information to professional advisers who
receive the same under a duty of confidentiality;
(e) to the disclosure of any information with the consent of the parties
hereto;
(f) to the disclosure to the Rating Agencies or any of them of such
information as may be requested by any of them for the purposes of
setting or reviewing the rating assigned to the Notes (or any of
them), provided that no information which would disclose the
identity of a Borrower shall be disclosed to the Rating Agencies or
any of them;
(g) to the disclosure of any information disclosed to a prospective
assignee of Funding (provided that it is disclosed on the basis that
the recipient will hold it confidential); or
(h) to any disclosure for the purposes of collecting in or enforcing the
Trust Property or any of it.
32. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Deed do not intend that any term of this Deed should
be enforced, by virtue of the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇, by any person who is not a party to this Deed.
33. ADDRESSES FOR NOTICES
Any notices to be given pursuant to this Deed to any of the parties hereto
shall be sufficiently served if sent by prepaid first class post, by hand
or facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched, (where delivered
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by hand) on the day of delivery if delivered before 17.00 hours on a
London Business Day or on the next London Business Day if delivered
thereafter or (in the case of first class post) when it would be received
in the ordinary course of the post and shall be sent:
(a) in the case of the Seller, to Abbey National plc, at Abbey National
House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇'▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile
number (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of the Company Secretary
with a copy to Abbey National plc, c/o Abbey House (AAM 126), ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number (44) 1908
343 019) for the attention of Securitisation Team, Customer Risk and
Decisioning;
(b) in the case of the Mortgages Trustee to ▇▇▇▇▇▇ Trustees Limited, c/o
Abbey National plc, Abbey National House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇'▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the
attention of the Company Secretary with a copy to Abbey National
plc, c/o Abbey House (AAM 126), ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ (facsimile number (▇▇) ▇▇▇▇ ▇▇▇ ▇▇▇) for the attention of
Securitisation Team, Customer Risk and Decisioning;
(c) in the case of Funding, to ▇▇▇▇▇▇ Funding Limited, c/o Abbey
National plc, Abbey National House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇'▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the
attention of the Company Secretary with a copy to Abbey National
plc, c/o Abbey House (AAM 126), ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ (facsimile number (▇▇) ▇▇▇▇ ▇▇▇ ▇▇▇) for the attention of
Securitisation Team, Customer Risk and Decisioning;
(d) in each case with a copy to the Security Trustee, for the attention
of JPMorgan Chase Bank, London Branch, Trinity Tower, 9 ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number (▇▇) ▇▇ ▇▇▇▇ ▇▇▇▇) for the
attention of The Manager, Trust Administration,
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party
to the others by written notice in accordance with the provisions of this
Clause 33.
34. GOVERNING LAW AND SUBMISSION TO JURISDICTION
34.1 Governing Law
This Deed is governed by, and shall be construed in accordance with,
English law.
34.2 Submission to Jurisdiction
Each party to this Deed hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts in any action or proceeding arising out
of or relating to this Deed, and hereby irrevocably agrees that all claims
in respect of such action or proceeding may be heard and determined by
such courts. Each party to this Deed hereby irrevocably waives, to the
fullest extent it may possibly do so, any defence or claim that the
English courts are an inconvenient forum for the maintenance or hearing of
such action or proceeding.
35. EXCLUSION ▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ is hereby excluded to the maximum extent permissible,
to the intent that it shall not apply to the trusts constituted hereunder
and that the parties shall be in the same position as they would be had
that Act not come into force.
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IN WITNESS of which this Deed has been duly executed and delivered by the
parties hereto as a deed which has been delivered on the date first appearing on
page one.
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SIGNATORIES
EXECUTED as a DEED by )
▇▇▇▇▇▇ FUNDING ) Director
LIMITED as Beneficiary )
acting by )
) Director/Secretary
EXECUTED as a DEED by )
▇▇▇▇▇▇ TRUSTEES ) Director
LIMITED as Mortgages Trustee )
acting by )
) Director/Secretary
EXECUTED as a DEED by )
SPV MANAGEMENT ) Director
LIMITED as Settlor )
acting by ) Director/Secretary
The COMMON SEAL of )
ABBEY NATIONAL PLC as ) Director
Seller, Cash Manager and Beneficiary )
was affixed in presence of: ) Secretary/Deputy Secretary/
Assistant Group Secretary
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