Exhibit 4.3.1
AMENDED AND RESTATED MORTGAGE SALE AGREEMENT
[*] 2006
HALIFAX PLC
AS SELLER AND ONE OF THE BENEFICIARIES
AND
PERMANENT FUNDING (NO. 1) LIMITED
AS FUNDING 1 AND ONE OF THE BENEFICIARIES
AND
PERMANENT FUNDING (NO. 2) LIMITED
AS FUNDING 2 AND ONE OF THE BENEFICIARIES
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
AS MORTGAGES TRUSTEE
AND
THE BANK OF NEW YORK
AS FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE
▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ LLP
CONTENTS
CLAUSE PAGE
1. Definitions and Construction............................................2
2. Sale and Purchase of Initial Portfolio..................................3
3. Initial Closing Date....................................................3
4. Sale and Purchase of New Portfolios.....................................5
5. Trust of Monies........................................................10
6. Completion of the Transfer of Loans....................................11
7. Undertakings...........................................................13
8. Warranties and Repurchase by the Seller................................15
9. Other Warranties.......................................................19
10. Further Assurance......................................................19
11. Consequences of Breach.................................................19
12. Subordination..........................................................20
13. Non?Merger.............................................................20
14. No Agency or Partnership...............................................20
15. Payments...............................................................20
16. Waiver and Variation...................................................20
17. Notices................................................................21
18. Assignment.............................................................21
19. Change of Funding 1 Security Trustee and/or Funding 2 Security
Trustee................................................................22
20. Not Used...............................................................22
21. Third Party Rights.....................................................22
22. Execution in counterparts; severability................................22
23. Governing Law..........................................................23
SCHEDULE
1. Representations and Warranties.........................................26
2. Registered Transfer....................................................34
3. Unregistered Transfer..................................................35
4. Lending Criteria.......................................................38
5. Power of Attorney in favour of Funding 1, Funding 2, the Mortgages
Trustee, the Funding 1 Security Trustee and the Funding 2 Security
Trustee................................................................42
6. Loan Repurchase Notice.................................................45
7. Assignment of Third Party Rights.......................................47
8. Assignment of Halifax Mortgage Re Limited MIG Policies.................50
9. Halifax Mortgage Re Limited MIG Policies Assignment notice.............54
10. Insurance Endorsement..................................................55
11. Insurance Acknowledgements.............................................57
12. New Portfolio Notice...................................................61
13. Forms of Scottish Transfer.............................................64
14. Forms of Scottish Transfer.............................................67
15. Form of Scottish Declaration of Trust..................................70
16. Form of Memorandum of Release..........................................77
17. Re-Assignment of MIG Policies..........................................78
18. Halifax Mortgage Re Limited MIG Policies Re-Assignment Notice..........82
APPENDIX
1. Initial Portfolio......................................................86
2. Standard Documentation.................................................86
3. Initial Portfolio......................................................87
4. Standard Documentation.................................................88
THIS AMENDED AND RESTATED MORTGAGE SALE AGREEMENT (this AGREEMENT) is made on
[*] 2006
BETWEEN:
(1) HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (acting in its
capacities as the SELLER and one of the BENEFICIARIES);
(2) PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a private
limited company incorporated under the laws of England and Wales, whose
registered office is at ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (acting in
its capacities as FUNDING 1 and one of the BENEFICIARIES);
(3) PERMANENT FUNDING (NO. 2) LIMITED (registered number 04441772), a private
limited company incorporated under the laws of England and Wales, whose
registered office is at ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (acting in
its capacities as FUNDING 2 and one of the BENEFICIARIES);
(4) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited company incorporated under the laws of Jersey, Channel Islands,
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Channel Islands (acting in its capacity as the MORTGAGES TRUSTEE); and
(5) THE BANK OF NEW YORK, a New York banking corporation, acting through its
offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (acting in its
capacity as FUNDING 1 SECURITY TRUSTEE and FUNDING 2 SECURITY TRUSTEE,
which expressions shall include such companies and all other persons or
companies for the time being acting as security trustee (or co-trustee)
pursuant to the terms of the Funding 1 Deed of Charge or the Funding 2
Deed of Charge (as applicable)).
WHEREAS:
(A) The Seller carries on the business of, inter alia, originating mortgage
loans to individual borrowers secured on residential properties in
England, Wales or Scotland.
(B) The Seller has sold to the Mortgages Trustee certain of the above
mentioned mortgage loans together with the benefit of their related
security on the terms and subject to the conditions set out in the
Mortgage Sale Agreement (as amended and/or restated by this Agreement and
from time to time, the MORTGAGE SALE AGREEMENT).
(C) The Mortgages Trustee holds all of the above mentioned mortgage loans as
bare trustee for the Beneficiaries upon, with and subject to the trusts,
powers and provisions of the Mortgages Trust Deed (as amended and/or
restated from time to time, the MORTGAGES TRUST DEED).
(D) On 12 March 2004 the parties to the Mortgage Sale Agreement (other than
Funding 2 which was not a party) agreed to amend the terms of the
Mortgage Sale Agreement as set out in an Amended and Restated Mortgage
Sale Agreement of the same date and the Seller sold a new portfolio of
mortgage loans to the Mortgages Trustee on 12 March 2004 on such amended
terms.
(E) On 22 July 2004 the parties to the Mortgage Sale Agreement (other than
Funding 2 which was not a party) agreed to amend the terms of the
Mortgage Sale Agreement as set out in an Amended and Restated Mortgage
Sale Agreement of the same date and the Seller sold a new portfolio of
mortgage loans to the Mortgages Trustee on 22 July 2004 on such amended
terms.
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(F) On 18 November 2004 the parties to the Mortgage Sale Agreement (other
than Funding 2 which was not a party) agreed to amend the terms of the
Mortgage Sale Agreement as set out in an Amended and Restated Mortgage
Sale Agreement of the same date and the Seller sold a new portfolio of
mortgage loans to the Mortgages Trustee on 18 November 2004 on such
amended terms.
(G) On 23 March 2005 the parties to the Mortgage Sale Agreement (other than
Funding 2 which was not a party) agreed to amend the terms of the
Mortgage Sale Agreement as set out in an Amended and Restated Mortgage
Sale Agreement of the same date and the Seller sold a new portfolio of
mortgage loans to the Mortgages Trustee on 23 March 2005 on such amended
terms.
(H) On 22 June 2005 the parties to the Mortgage Sale Agreement (other than
Funding 2 which was not a party) agreed to amend the terms of the
Mortgage Sale Agreement as set out in an Amended and Restated Mortgage
Sale Agreement of the same date and the Seller sold a new portfolio of
mortgage loans to the Mortgages Trustee on 22 June 2005 on such amended
terms.
(I) On 22 March 2006 the parties to the Mortgage Sale Agreement (other than
Funding 2 which was not a party) agreed to amend the terms of the
Mortgage Sale Agreement as set out in an Amended and Restated Mortgage
Sale Agreement of the same date and the Seller sold a new portfolio of
mortgage loans to the Mortgages Trustee on 22 March 2006 on such amended
terms.
(J) Funding 2 wishes to become party to, and the parties wish to amend and
restate, the Mortgage Sale Agreement. The parties to the Mortgage Sale
Agreement (other than Funding 2 which was not a party) and Funding 2 have
agreed to amend and restate the terms of the Mortgage Sale Agreement as
set out herein and the Seller may sell new portfolios of mortgage loans
and their related security to the Mortgages Trustee on such amended
terms.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated [*]
2006 (as the same may be amended, varied or supplemented from time to
time with the consent of the parties to this Agreement) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and specifically
incorporated into this Agreement and, accordingly, the expressions
defined in the Master Definitions and Construction Schedule (as so
amended, varied or supplemented from time to time) 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 the Master Definitions
and Construction Schedule.
1.2 Any reference in this Agreement to any discretion, power, right, duty or
obligation on the part of the Mortgages Trustee shall be as exercised by
the Mortgages Trustee subject in each case to the provisions of the
Mortgages Trust Deed and the Controlling Beneficiary Deed.
1.3 For the purposes of Section 2 of the Law of Property (Miscellaneous
Provisions) ▇▇▇ ▇▇▇▇, the terms of the Transaction Documents are, so far
as applicable, incorporated herein.
1.4 The Initial Portfolio contained as Part 1 of the Exhibit to this
Agreement and any schedule of New Loans attached to any New Portfolio
Notice may be provided in a document stored upon electronic media
(including, but not limited to, a CD-ROM) in a form acceptable to the
Mortgages Trustee, the Funding 1 Security Trustee, Funding 1 and, on and
after the Programme Date, Funding 2 and the Funding 2 Security Trustee
(each acting reasonably).
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1.5 This Agreement amends and restates the Mortgage Sale Agreement made on
the 14 June 2002 as amended and restated on the 6 March 2003, 25 November
2003, 12 March 2004, 22 July 2004, 18 November 2004, 23 March 2005, 22
June 2005 and 22 March 2006 (the PRINCIPAL AGREEMENT). As of the date of
this Agreement, any future rights or obligations (excluding such
obligations accrued to the date of this Agreement) of a party under the
Principal Agreement shall be extinguished and shall instead be governed
by this Agreement.
2. SALE AND PURCHASE OF INITIAL PORTFOLIO
2.1 Subject to CLAUSE 2.2, in consideration of the Purchase Price (which
shall be paid in accordance with CLAUSE 3.3) and the covenant of the
Mortgages Trustee to hold the Trust Property upon trust, with and subject
to all the trusts, powers and provisions of the Mortgages Trust Deed, the
Seller hereby agrees to sell to the Mortgages Trustee with full title
guarantee, the Initial Portfolio on the Initial Closing Date.
2.2 The obligation of the Seller under CLAUSE 2.1 shall be subject to and
conditional upon:
(a) the issue by the First Issuer of the Issuer Notes on the Initial
Closing Date and the borrowing by Funding 1 of the Term Advances
under the First Issuer Intercompany Loan Agreement;
(b) the constitution of the Mortgages Trust on or prior to the Initial
Closing Date; and
(c) the Transaction Documents in existence on the Initial Closing Date
having been executed and delivered by the parties thereto on or
before the Initial Closing Date.
2.3 The sale of the Portfolio shall not include any obligation to pay any
Delayed Cashbacks, Home Cash Reserve Drawings or Flexible Loan Drawings
(if any), which obligation shall at all times, and notwithstanding the
sale of the Portfolio, remain an obligation of the Seller.
3. INITIAL CLOSING DATE
3.1 (a) A meeting shall take place at 11.00 a.m. on the Initial Closing
Date at the offices of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ or such other time or offices as the parties may agree at
which the Seller shall deliver to the Funding 1 Security Trustee
or its representative the following documents:
(i) two originals of the power of attorney dated as at the
Initial Closing Date and substantially in the form set out
in SCHEDULE 5 hereto, duly executed by the Seller;
(ii) a certified copy of each of the duly executed Insurance
Acknowledgements;
(iii) a certified copy of each of the duly executed Insurance
Endorsements;
(iv) a duly executed assignment of the Halifax Mortgage Re
Limited MIG Policies to the extent that they relate to the
Mortgages comprised in the Initial Portfolio from the
Seller to the Mortgages Trustee and a certified copy of a
notice (the original of which shall be served by the Seller
by courier or by special delivery) of such assignment from
the Seller to HBOS Insurance (PCC) Guernsey Limited dated
as at the Initial Closing Date and in the form (mutatis
mutandis) set out in SCHEDULE 8 and SCHEDULE 10 hereto
respectively and a certified copy of consent to assignment
of the Halifax Mortgage Re Limited MIG Policies (or
acknowledgement that the Mortgages Trustee will be an
insured in respect of the Initial Portfolio under the
Halifax Mortgage Re Limited MIG Policies following such
assignment) from HBOS
3
Insurance (PCC) Guernsey Limited in such form as HBOS
Insurance (PCC) Guernsey Limited reasonably requires;
(v) a certificate of a duly authorised officer of the Seller
dated as at the Initial Closing Date attaching a copy of
the board minute of the Seller authorising its duly
appointed representatives to agree the sale of the
Portfolio and authorising execution and performance of this
Agreement, the Servicing Agreement, the other Transaction
Documents to which the Seller is a party (in any capacity)
and all of the documentation to be entered into pursuant to
this Agreement and confirming that the resolutions referred
to therein are in full force and effect and have not been
amended or rescinded as at the date of the certificate;
(vi) a duly executed assignment of rights against third parties
comprised in the Initial Portfolio dated as at the Initial
Closing Date and in the form of the Assignment of Third
Party Rights; and
(vii) a solvency certificate from an authorised signatory of the
Seller dated the Initial Closing Date in a form acceptable
to the Mortgages Trustee, Funding 1 and the Funding 1
Security Trustee (each acting reasonably).
(b) The parties hereto acknowledge that completion on the Initial
Closing Date of the sale to the Mortgages Trustee of all of the
Seller's right, title, interest and benefit in and to the Initial
Portfolio subject to the terms and provisions of the Mortgages
Trust Deed shall occur as indicated in this CLAUSE 3, provided
that the matters described in CLAUSES 6.2, 6.3, 6.4 and 6.5 shall
not occur until the relevant time indicated in CLAUSE 6 or, as
applicable, CLAUSE 7.4.
3.2 The Seller undertakes that from the Initial Closing Date until the
perfection of the assignment or assignation (as appropriate) in
accordance with CLAUSES 6.1, 6.2, 6.3, 6.4 and 6.5, the Seller shall hold
the Title Deeds and Customer Files relating to the Portfolio that are in
its possession or under its control or held to its order to the order of
the Mortgages Trustee or as the Mortgages Trustee shall otherwise direct.
3.3 Subject to fulfilment of the conditions referred to in CLAUSES 2.2 and 3,
the Seller shall be paid the Purchase Price by telegraphic transfer by
Funding 1 on the Initial Closing Date.
3.4 The Seller shall provide all reasonable co-operation to the Mortgages
Trustee, the Funding 1 Security Trustee, Funding 1, and, on and after the
Programme Date, Funding 2 and the Funding 2 Security Trustee to enable
them to carry out their respective duties and enforce their rights under
the Transaction Documents. Without prejudice to the generality of the
foregoing, the Seller shall:
(a) upon reasonable prior notice and during normal office hours,
permit the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee, the Funding 2 Security Trustee and their
authorised employees and agents and other persons nominated by the
Funding 1 Security Trustee and/or the Funding 2 Security Trustee
and approved by the Seller (such approval not to be unreasonably
withheld or delayed), to review the Customer Files and the Title
Deeds in relation to the Portfolio (subject to such person(s)
agreeing to keep the same confidential but provided that
disclosure shall be permitted to the professional advisors and
auditors of the party to whom such disclosure is made and/or to
the extent that such disclosure is required by law or for the
purpose of any judicial or other proceedings); and/or
(b) give promptly all such information and explanations relating to
the Loans and their Related Security as the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee or the
Funding 2 Security Trustee may reasonably request (including a
list of the Loans and
4
their Related Security in the Portfolio along with details of the
location of the Title Deeds relating thereto),
provided that prior to completion in accordance with CLAUSE 6, the Seller
shall be under no obligation to provide any information or documentation
to any person other than the Mortgages Trustee, the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee or their respective
employees and/or professional advisors or allow such person access to the
Customer Files or Title Deeds if to do so would result in a breach of the
applicable Mortgage Terms or the Data Protection ▇▇▇ ▇▇▇▇.
4. SALE AND PURCHASE OF NEW PORTFOLIOS
4.1 Subject to fulfilment of the conditions set out in CLAUSES 2.2, 3.1, 4.2
(or as applicable, 4.3) and 4.4 and the restriction set out in CLAUSE
2.3, if the Seller shall, at any time and from time to time serve a
properly completed New Portfolio Notice on the Mortgages Trustee, Funding
1 and Funding 2 with a copy to each of the Funding 1 Security Trustee and
the Funding 2 Security Trustee (such service to be in the Seller's sole
discretion), the Seller agrees that on the date for completion of the
sale specified in such New Portfolio Notice the Seller shall sell with
full title guarantee (or in relation to rights and assets situated in or
governed by the law of Scotland with absolute warrandice) to the
Mortgages Trustee the relevant New Portfolio.
4.2 The conditions to be met as at each Sale Date are:
(a) no event of default under the Transaction Documents shall have
occurred which is continuing as at the relevant Sale Date;
(b) in the case of Funding 1, the Principal Deficiency Ledger shall
not have a debit balance as at the most recent Funding 1 Interest
Payment Date after applying all Funding 1 Available Revenue
Receipts on that Funding 1 Interest Payment Date and in the case
of Funding 2, the Funding 2 Principal Deficiency Ledger shall not
have a debit balance as at the most recent Funding 2 Interest
Payment Date after applying all Funding 2 Available Revenue
Receipts on that Funding 2 Interest Payment Date;
(c) the Mortgages Trustee is not aware that the purchase of the New
Portfolio on the relevant Sale Date would adversely affect the
then current rating by the Rating Agencies of any of the
outstanding Notes of the Funding 1 Issuers or of the Master
Issuer;
(d) as at the relevant Sale Date, the Seller has not received any
notice that the short term, unsecured, unguaranteed and
unsubordinated debt obligations of the Seller are not rated at
least P-1 by ▇▇▇▇▇'▇, A-1 by S&P and F1 by Fitch at the time of,
and immediately following, the sale of New Loans to the Mortgages
Trustee;
(e) as at the relevant Sale Date, the aggregate Outstanding Principal
Balance of the Loans in the Mortgages Trust, in respect of which
the aggregate amount in arrears is more than three times the
Monthly Payment then due, is less than 5 per cent. of the
aggregate Outstanding Principal Balance of the Loans in the
Mortgages Trust;
(f) except where Funding 1 and/or Funding 2 pays amounts to the Seller
in consideration of New Loans to be sold to the Mortgages Trustee,
the aggregate Outstanding Principal Balance (excluding Arrears of
Interest) of New Loans transferred in any three-month period must
not exceed 15 per cent. of the aggregate Outstanding Principal
Balance of Loans (excluding Arrears of Interest) in the Mortgages
Trust as at the beginning of that three-month period;
5
(g) the sale of the New Portfolio on the relevant Sale Date does not
result in the product of WAFF and WALS for the Loans in the
Mortgages Trust after such purchase calculated on the relevant
Sale Date (in the same way as for the Initial Portfolio (or as
agreed by the Servicer and the Rating Agencies from time to time))
exceeding the product of WAFF and WALS for the Loans in the
Mortgages Trust calculated on the Programme Date plus 0.25 per
cent.;
(h) the yield (as calculated below) of the Loans in the Mortgages
Trust together with the yield of the New Loans to be sold to the
Mortgages Trustee on the relevant Sale Date (together for the
purposes of this paragraph, the RELEVANT LOANS) is at least 0.50
per cent. greater than Sterling-LIBOR for three-month sterling
deposits as at the previous [Interest Payment Date], after taking
into account the average yield on the Loans which are Variable
Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the
margins on the Funding 1 Swap(s) and/or the Funding 2 Swap(s), in
each case as at the relevant Sale Date. The yield of the Relevant
Loans is to be calculated as follows:
(AxB)+(Cx(D-E+F))+(Gx(H+I))
---------------------------
J
where,
(A) = the Outstanding Principal Balance, on the relevant Sale
Date, of the Relevant Loans which are Fixed Rate Loans;
(B) = the interest rate receivable by Funding 1 under the
Funding 1 Fixed?Floating Rate Swap and by Funding 2
under the Funding 2 Fixed?Floating Rate Swap, in each
case as at the relevant Sale Date;
(C) = the Outstanding Principal Balance, on the relevant Sale
Date, of the Relevant Loans which are Variable Rate
Loans;
(D) = the weighted average Variable Base Rate of the Relevant
Loans which are Variable Rate Loans on the relevant Sale
Date;
(E) = the Variable Rate Swap SVR for the Relevant Loans which
are Variable Rate Loans on the relevant Sale Date;
(F) = the interest rate receivable by Funding 1 under the
Funding 1 Variable Rate Swap and by Funding 2 under the
Funding 2 Variable Rate Swap, in each case as at the
relevant Sale Date;
(G) = the Outstanding Principal Balance, on the relevant Sale
Date, of the Relevant Loans which are Tracker Rate
Loans;
(H) = the interest rate receivable by Funding 1 under the
Tracker Rate Swap and by Funding 2 under the Funding 2
Tracker Rate Swap, in each case as at the relevant Sale
Date;
(I) = the weighted average margin of the Relevant Loans which
are Tracker Rate Loans over or under the Bank of England
repo rate on the relevant Sale Date; and
(J) = the Outstanding Principal Balance of the Relevant Loans
on the relevant Sale Date;
6
(i) the sale of the New Loans on the relevant Sale Date does not
result in the loan-to-value ratio of the Loans and the New Loans
after application of the LTV Test on the relevant Sale Date
exceeding the loan-to-value ratio (based on the LTV Test) of Loans
in the Portfolio on the Programme Date plus 0.25 per cent.;
(j) the sale of the New Loans on the relevant Sale Date does not
result in Loans (other than Fixed Rate Loans) which, after taking
into account the Funding 1 Swap(s) and the Funding 2 Swap(s), will
yield less than Sterling-LIBOR plus 0.50 per cent. as at the
relevant Sale Date and that have more than two years remaining on
their incentive period accounting for more than 15 per cent. of
the aggregate Outstanding Principal Balance of all Loans
comprising the Trust Property;
(k) the sale of the New Loans on the relevant Sale Date does not
result in the Fixed Rate Loans which have more than one year
remaining on their incentive period accounting for more than 50
per cent. of the aggregate Outstanding Principal Balance of Loans
comprised in the Trust Property;
(l) no sale of New Loans may occur, if, as at the relevant Sale Date,
the Step-up Date in respect of any Note issued by a Funding 1
Issuer issued after 1 January 2003 and still outstanding has been
reached and such Note issued by a Funding 1 Issuer has not been
redeemed in full. For the avoidance of doubt, this prohibition on
the sale of New Loans to the Mortgages Trustee shall remain in
effect only for so long as any such Note issued by a Funding 1
Issuer remains outstanding and, upon its redemption, the sale of
New Loans to the Mortgages Trustee may be resumed in accordance
with the terms of this Agreement;]
(m) no sale of new Loans may occur, if, as at the relevant Sale Date,
the Step-up Date in respect of any Note issued after the Programme
Date and still outstanding has been reached and such note has not
been redeemed in full. For the avoidance of doubt, this
prohibition on the sale of New Loans to the Mortgages Trustee
shall remain in effect only for so long as any such note remains
outstanding and, upon its redemption, the sale of New Loans to the
Mortgages Trustee may be resumed in accordance with the terms of
this Agreement;
(n) as at the Sale Date, in the case of Funding 1, the adjusted
General Reserve Fund is equal to or greater than the General
Reserve Fund Threshold, and in the case of Funding 2, the Funding
2 General Reserve Fund is equal to or greater than the Funding 2
General Reserve Fund threshold;
(o) if the sale of New Loans includes the sale of New Loan Types to
the Mortgages Trustee, the Funding 1 Security Trustee and the
Funding 2 Security Trustee have received written confirmation from
each of the Rating Agencies that such New Loan Types may be sold
and assigned to the Mortgages Trustee and that such sale of New
Loan Types would not have an adverse effect on the then current
ratings of the outstanding Notes of the Funding 1 Issuers or of
the Master Issuer;
(p) each of the Funding 1 Swap Agreement and the Funding 2 Swap
Agreement has been modified as required (or, if appropriate,
Funding 1 and/or Funding 2 has entered into a new swap agreement)
to hedge against the interest rates payable in respect of such New
Loans and the floating rate of interest payable on the
Intercompany Loan (in the case of Funding 1) or the Master
Intercompany Loan (in the case of Funding 2); and
(q) no Trigger Event has occurred on or before the relevant Sale Date;
provided that the Mortgages Trustee may vary or waive the conditions set
out in this CLAUSE 4.2 where it has received written confirmation from
each Rating Agency that such variation or waiver
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will not cause the ratings of the outstanding Notes of the Funding 1
Issuers or of the Master Issuer to be reduced, withdrawn or qualified. In
this CLAUSE 4.2 references to any Monthly Payment due at any date means
the Monthly Payment payable in respect of the month in which that date
falls.
4.3 The obligations of the Seller under CLAUSE 4.1 shall be subject to and
conditional upon no Insolvency Event having occurred which is continuing
as at the relevant Sale Date.
4.4 Subject to fulfilment of the conditions referred to in CLAUSES 4.2, 4.3,
4.4, 4.5 and 4.6, the consideration to be provided to the Seller for the
sale and assignment of the New Portfolio to the Mortgages Trustee on a
Sale Date shall be the aggregate of:
(a) the payment by Funding 1 and/or Funding 2 to the Seller by
telegraphic transfer on the relevant Sale Date of the proceeds of:
(i) in the case of Funding 1, any New Term Advance under a New
Intercompany Loan Agreement advanced to Funding 1 by a New
Issuer; and/or
(ii) in the case of Funding 2, any Loan Tranche under the Master
Intercompany Agreement advanced to Funding 2 by the Master
Issuer under the Master Intercompany Loan; and/or
(iii) any New Intercompany Loans made by a New Issuer to Funding
1 or Funding 2; and/or
(b) the covenant, by Funding 1 and Funding 2 to pay, at a later date,
Deferred Consideration to the Seller; and/or
(c) the covenant of the Mortgages Trustee to hold the Trust Property
on trust for the Seller (as to the Seller Share), Funding 1 (as to
the Funding 1 Share) and Funding 2 (as to the Funding 2 Share)
pursuant to the terms of the Mortgages Trust Deed.
4.5 (a) On the date of the sale of the relevant New Portfolio the Seller
shall deliver to the Funding 1 Security Trustee, the Funding 2
Security Trustee or their representative the following documents:
(i) on the date of the first sale of a relevant New Portfolio
including Scottish Loans:
(A) two originals of the power of attorney dated as at
the Sale Date and substantially in the form set out
in SCHEDULE 5 hereof duly executed by the Seller;
(B) a certified copy of each of the duly executed
Insurance Acknowledgements; and
(C) a certified copy of each of the duly executed
Insurance Endorsements;
(ii) a duly executed assignment of the Halifax Mortgage Re
Limited MIG Policies to the extent that they relate to the
Mortgages comprised in the relevant New Portfolio from the
Seller to the Mortgages Trustee and a certified copy of a
notice (the original of which shall be served by the Seller
by courier or by special delivery) of such assignment from
the Seller to HBOS Insurance (PCC) Guernsey Limited dated
as of the relevant Sale Date and in the form (mutatis
mutandis) set out in SCHEDULE 8 and SCHEDULE 9 hereof
respectively and a certified copy of consent to assignment
of the Halifax Mortgage Re Limited MIG policies (or
acknowledgement that the
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Mortgages Trustee will be an insured under the Halifax
Mortgage Re Limited MIG Policies following the assignment)
from HBOS Insurance (PCC) Guernsey Limited in such form as
HBOS Insurance (PCC) Guernsey Limited reasonably requires;
(iii) a duly executed assignment of rights against third parties
comprised in the relevant New Portfolio dated as at the
relevant Sale Date and in the form of the Assignment of
Third Party Rights;
(iv) a certified copy of each of the duly executed Insurance
Acknowledgements;
(v) on any Sale Date that Funding 1 and/or Funding 2 provides
consideration for New Loans to be sold to the Mortgages
Trustee pursuant to CLAUSE 4.4(A) above only, a certificate
of a duly authorised officer of the Seller dated as at the
relevant Sale Date attaching either (A) a copy of the board
minute referred to in CLAUSE 3.1(A)(V) or (B) any board
minutes or considerations, notes and resolutions of the
Seller or its duly authorised delegate (as applicable)
authorising its duly appointed representatives to agree the
sale of a New Portfolio, and authorising the execution and
performance of the Transaction Documents to which the
Seller is party, in each case confirming that the
resolutions referred to therein are in full force and
effect and have not been amended or rescinded as at the
date of the certificate;
(vi) on any Sale Date that Funding 1 and/or Funding 2 provides
consideration for New Loans to be sold to the Mortgages
Trustee pursuant to CLAUSE 4.4(A) above only, a solvency
certificate from an authorised signatory of the Seller
dated as at the relevant Sale Date; and
(vii) a Scottish Declaration of Trust in respect of any Scottish
Loans and their Related Security comprised in the relevant
New Portfolio, in the form (mutatis mutandis) set out in
SCHEDULE 15 and with the annexure thereto duly completed,
duly executed by the Seller, the Mortgages Trustee, Funding
1 and, on and after the Programme Date, Funding 2.
(b) The parties hereto acknowledge that completion on each relevant Sale Date
of the sale to the Mortgages Trustee of all of the Seller's right, title,
interest and benefit in and to the relevant New Portfolio subject to the
terms and provisions of the Mortgages Trust Deed shall occur as indicated
in this CLAUSE 4 PROVIDED THAT the matters described in CLAUSES 6.5 and
6.6 shall not occur until the relevant time indicated in CLAUSE 6 or, as
applicable, CLAUSE 7.4.
4.6 (a) The Seller undertakes that from the relevant Sale Date until the
perfection of the assignment or assignation (as appropriate) in
accordance with CLAUSES 6.1, 6.2, 6.3, 6.4 and 6.5, the Seller
shall hold the Title Deeds and Customer Files relating to the New
Portfolio that are in its possession or under its control or held
to its order to the order of the Mortgages Trustee or as the
Mortgages Trustee shall direct.
(b) The Seller undertakes that within three (3) London Business Days
of the Sale Date to provide the Mortgages Trustee, the Funding 1
Security Trustee and the Funding 2 Security Trustee with an
updated, complete and accurate list of the Loans and their Related
Security which comprise the New Portfolio which may be provided in
a document stored upon electronic media (including, but not
limited to a CD-Rom) in a form acceptable to the Mortgages
Trustee, the Funding 1 Security Trustee and the Funding 2 Security
Trustee (each acting reasonably).
4.7 Prior to the earlier to occur of:
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(a) a Trigger Event:
(b) (i) if Funding 1 does not enter into a New Intercompany Loan
Agreement, the Funding 1 Interest Payment Date in September
2012; or
(ii) on each occasion that Funding 1 enters into a New
Intercompany Loan Agreement, the latest Funding 1 Interest
Payment Date specified by Funding 1 by notice in writing to
the Seller, Funding 2 and the Mortgages Trustee as applying
in relation to this covenant; and
(c) on the date that Funding 2 enters into the Master Intercompany
Loan Agreement and on each occasion that the Master Issuer
advances Funding 2 a Loan Tranche under the Master Intercompany
Loan Agreement, the latest Funding 2 Interest Payment Date
specified by Funding 2 by notice in writing to the Seller, Funding
1 and the Mortgages Trustee as applying in relation to this
covenant,
the Seller undertakes to use all reasonable endeavours to offer to sell,
in accordance with the provisions of this CLAUSE 4, to the Mortgages
Trustee and the Mortgages Trustee undertakes to use all reasonable
endeavours to acquire from the Seller and to hold pursuant to the terms
of the Mortgages Trust Deed until the earlier of the occurrence of a
Trigger Event or the date set out in PARAGRAPHS (B) OR (C) above,
sufficient New Loans and their Related Security so that the aggregate
Outstanding Principal Balance of Loans in the Portfolio during the period
from and including the relevant Closing Date to but excluding the date
specified in any notice from Funding 1 or Funding 2 given pursuant to
PARAGRAPH (B) OR (C) above is not less than the amount specified in such
notice provided that the Seller shall not be obliged to sell to the
Mortgages Trustee, and the Mortgages Trustee shall not be obliged to
acquire, New Loans and their Related Security if in the reasonable
opinion of the Seller the sale to the Mortgages Trustee of New Loans and
their Related Security would adversely affect the business of the Seller.
4.8 On each Sale Date that Funding 1 and/or Funding 2 provides consideration
for New Loans to be sold to the Mortgages Trustee pursuant to CLAUSE
4.4(A) above, the Beneficiaries shall appoint a firm of independent
auditors to undertake a due diligence exercise on a sample of the
Customer Files relating to the New Loans to be sold to the Mortgages
Trustee on the relevant Sale Date. The costs of such independent auditors
shall be borne by the relevant Funding 1 Issuer or the Master Issuer, as
the case may be, which is making a Term Advance or advancing a Loan
Tranche to Funding 1 or Funding 2, as the case may be, (which shall be
procured by Funding 1 or Funding 2, as applicable).
4.9 By way of additional consideration for the Initial Portfolio and the New
Portfolios, Funding 1 and Funding 2 shall pay to the Seller Deferred
Consideration in the amount and in the manner provided in the Funding 1
Deed of Charge and the Funding 2 Deed of Charge. The amount payable under
this CLAUSE 4.9 shall be payable without allocation among the Initial
Portfolio and the New Portfolios and is payable notwithstanding the
actual amount of the Portfolio.
5. TRUST OF MONIES
5.1 Notwithstanding the sales effected by this Agreement, if at, or at any
other time after, a Closing Date (but prior to any repurchase in
accordance with CLAUSE 8.5) the Seller holds, or there is held to its
order, or it receives, or there is received to its order any property,
interests, rights or benefits and/or the proceeds thereof hereby agreed
to be sold, the Seller undertakes to each of the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee that, subject to CLAUSE 6, it will promptly remit,
assign and/or transfer the same to the Mortgages Trustee or, if
appropriate, the Funding 1 Security Trustee and the Funding 2 Security
Trustee and until it does so or to the extent that the Seller is unable
to effect such remittance, assignment,
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assignation or transfer, it will hold such property, interests, rights or
benefits and/or the proceeds thereof upon trust for the Mortgages Trustee
subject at all times to the Mortgages Trust.
5.2 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, interests, rights or benefits
relating to:
(a) any Loan or Loans under a Mortgage Account and its Related
Security repurchased by the Seller pursuant to CLAUSE 8.5; or
(b) (without prejudice to CLAUSE 12) amounts owed by a Borrower to the
Seller which the Seller has not agreed to sell under CLAUSE 2.1,
and/or the proceeds thereof, the Mortgages Trustee undertakes to the
Seller that it will remit, assign, re-assign, retrocess or transfer the
same 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, assignation, assignment, re?assignment, retrocession or
transfer, the Mortgages Trustee undertakes to hold such property,
interests, rights or benefits and/or the proceeds thereof upon trust for
the Seller as the beneficial owner thereof or as the Seller may direct
provided that the Mortgages Trustee shall not be in breach of its
obligations under this CLAUSE 5 if, having received any such monies and
paid them to third parties in error, it pays an amount equal to the
monies so paid in error to the Seller in accordance with the Servicing
Agreement.
6. COMPLETION OF THE TRANSFER OF LOANS
6.1 The assignments or assignations (as appropriate) contemplated by this
Agreement shall be perfected on the twentieth London Business Day after
the earliest to occur of:
(a) the service of an Intercompany Loan Acceleration Notice in
relation to any Intercompany Loan, a Master Intercompany Loan
Acceleration Notice in relation to the Master Intercompany Loan or
a Note Acceleration Notice in relation to any Notes of any Funding
1 Issuer or the Master Issuer; or
(b) the Seller being required to perfect the Mortgages Trustee's legal
title to the Mortgages, or procure any or all of the acts referred
to in this CLAUSE 6 by an order of a court of competent
jurisdiction or by any regulatory authority of which the Seller is
a member or any organisation whose members comprise (but are not
necessarily limited to) mortgage lenders and with whose
instructions it is customary for the Seller to comply; or
(c) it becoming necessary by law to do any or all of the acts referred
to in this CLAUSE 6; or
(d) (i) the Funding 1 Security Trustee certifying that, in its
reasonable opinion, the property, assets and rights of
Funding 1 comprised in the security constituted by the
Funding 1 Deed of Charge or any material part thereof
is/are in jeopardy; or
(ii) the Funding 2 Security Trustee certifying that, in its
reasonable opinion, the property, assets and rights of
Funding 2 comprised in the security constituted by the
Funding 2 Deed of Charge or any material part thereof
is/are in jeopardy,
and that the doing of any or all of the acts referred to in
CLAUSES 6.2 to 6.6 inclusive is necessary in order materially to
reduce such jeopardy; or
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(e) unless otherwise agreed in writing by the Rating Agencies, the
Funding 1 Security Trustee and the Funding 2 Security Trustee, the
termination of the Seller's role as Servicer under the Servicing
Agreement; or
(f) the Seller calling for perfection by serving notice in writing to
that effect on the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee and the Funding 2 Security Trustee; or
(g) the date on which the Seller ceases to be assigned a long term
unsecured, unsubordinated debt obligation rating from S&P of at
least BBB- or from Moody's of at least Baa3 or from Fitch of at
least BBB-; or
(h) the occurrence of an Insolvency Event in relation to the Seller;
or
(i) the latest of the last repayment dates of the Intercompany Loan
Agreements, the master Intercompany Loan Agreement and any other
New Intercompany Loan Agreement where such loan has not been
discharged in full.
6.2 Completion of the transfer of the English Mortgages in the Portfolio
shall be effected by:
(a) a Registered Transfer, in the case of English Mortgages over
Registered Land (in the form set out in SCHEDULE 2); and
(b) an Unregistered Transfer, in the case of English Mortgages over
Unregistered Land (in the form set out in SCHEDULE 3).
6.3 Completion of the transfer of the Scottish Mortgages in the Portfolio
shall be effected by:
(a) the completion and registration in the Land Register of Scotland
of an SLR Transfer (in the form set out in SCHEDULE 13), in the
case of Scottish Mortgages over Properties title to which is
registered in the Land Register of Scotland; and
(b) the completion and recording in the General Register of Sasines of
a Sasine Transfer (in the form set out in SCHEDULE 14), in the
case of Scottish Mortgages over Properties title to which is
recorded in the General Register of Sasines.
6.4 Completion of the transfer of any other matter comprised in the Portfolio
shall be effected by a transfer, conveyance or assignation in such form
as the Mortgages Trustee may reasonably require.
6.5 Subject to CLAUSE 7.5, prior to perfection pursuant to CLAUSE 6.1, none
of the Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee or the Funding 2 Security Trustee will:
(a) submit or require the submission of any notice, form, request or
application to or pay any fee for the registration of, or the
noting of any interest at the Land Charges Department of the Land
Registry or at the Land Registry or Registers of Scotland in
relation to, the Mortgages Trustee's and/or Funding 1's and/or
Funding 2's interests in the Portfolio;
(b) give or require the giving of any notice to any Borrower of the
assignment or assignation of that Borrower's Loan and its Related
Security to the Mortgages Trustee, the charge by Funding 1 of
Funding 1's interest in that Borrower's Loan and its Related
Security to the Funding 1 Security Trustee pursuant to the Funding
1 Deed of Charge or the charge by Funding 2 of Funding 2's
interest in that Borrower's Loan and its Related Security to the
Funding 2 Security Trustee pursuant to the Funding 2 Deed of
Charge; or
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(c) send or require to be sent to any solicitor who has acted on
behalf of the Seller in respect of any Mortgage with respect to
which the Seller has not received a complete set of the Title
Deeds a letter or other communication requiring such solicitor to
hold such documents to the order of the Mortgages Trustee or
Funding 1 Security Trustee and the Funding 2 Security Trustee (as
the case may be).
6.6 Within 25 London Business Days following perfection pursuant to CLAUSE
6.1, the Seller will do such of the acts or things referred to in CLAUSES
6.2 to 6.5 as the Funding 1 Security Trustee, the Funding 2 Security
Trustee or the Mortgages Trustee requires the Seller to do.
6.7 The Seller shall indemnify each of the Mortgages Trustee, Funding 1,
Funding 2, Funding 1 Security Trustee and the Funding 2 Security Trustee
from and against any and all costs, fees and expenses (including, without
limitation, legal fees and expenses and any applicable VAT thereon) which
may be incurred by the Mortgages Trustee and/or Funding 1 and/or Funding
2 and/or the Funding 1 Security Trustee and/or the Funding 2 Security
Trustee by reason of the doing of any act, matter or thing referred to in
this CLAUSE 6 and CLAUSE 7.5.
7. UNDERTAKINGS
7.1 The Mortgages Trustee, Funding 1 and Funding 2 undertake to the Seller
that they will at all times (or will direct the Servicer at all times to)
use reasonable endeavours to administer and enforce (and exercise their
powers and rights and perform their obligations under) the Loans
comprised in the Portfolio and their Related Security in accordance with
the Seller's Policy (for so long as it exists and thereafter in
accordance with such policies as would be applied by a Reasonable,
Prudent Mortgage Lender in the conduct of its business), provided that if
the Seller fails to comply with its obligations to repurchase any Loan
and its Related Security pursuant to CLAUSE 8.5 the Mortgages Trustee
shall be entitled to waive any Early Repayment Fee in respect of such
Loan and its Related Security if, in the Mortgages Trustee's reasonable
opinion, such waiver is reasonably necessary in order to effect an
interest rate change.
7.2 The Seller hereby undertakes to the Mortgages Trustee, Funding 1 and
Funding 2 that, in the event that any Borrower establishes that it has at
any time prior to the Initial Closing Date or, as the case may be, the
relevant Sale Date, paid to the Seller any amounts in excess of sums due
to the Seller as at the date of payment under the Mortgage Conditions
applicable to that Loan, the Seller will reimburse the Borrower for such
overpayment together with any interest, cost or other expense associated
therewith. The Seller further agrees to hold the Mortgages Trustee,
Funding 1 and Funding 2 harmless against any such claims and to indemnify
the Mortgages Trustee, Funding 1 and Funding 2 on an after Tax basis in
relation to any costs, expense, loss or other claim which may arise in
connection therewith. Any payment made by the Seller to the Mortgages
Trustee, Funding 1 and Funding 2 in discharge of the foregoing indemnity
shall be regarded as a rebate of part of the purchase price of the
relevant Loan.
7.3 Each of the Seller, the Mortgages Trustee, Funding 1 and Funding 2
undertakes to each other and to Funding 1 Security Trustee and the
Funding 2 Security Trustee that if and to the extent that any
determination shall be made by any court or other competent authority or
any ombudsman in respect of any Loan and its Related Security that:
(a) any term which relates to the recovery of interest under the
Standard Documentation applicable to that Loan and its Related
Security is unfair; or
(b) the interest payable under any Loan is to be set by reference to
HVR 1 or HVR 2 (as applicable) (and not a rate set by the Seller's
successors or assigns or those deriving title from them); or
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(c) the variable margin above the Bank of England repo rate under any
Tracker Rate Loan must be set by the Seller (rather than by its
successors or assigns or those deriving title from them) and such
rate is lower than the rate set by the Seller's successors or
assigns or those deriving title from them; or
(d) the interest payable under any Loan is to be set by reference to
an interest rate other than that set or purported to be set by
either the Servicer or the Mortgages Trustee as a result of the
Seller having more than one variable mortgage rate,
then, at the Beneficiaries' direction given in accordance with the
Controlling Beneficiary Deed (subject to the prior written consent of the
Funding 1 Security Trustee and the Funding 2 Security Trustee), the
Mortgages Trustee will serve upon the Seller a notice in the form of the
Loan Repurchase Notice requiring the Seller to repurchase the relevant
Loan and all other Loans under the relevant Mortgage Account and its
Related Security in accordance with CLAUSE 8.5 (but in the case of a
determination in respect of (b) above, only if at any time on or after
such determination, HVR 1 or HVR 2 (as applicable) shall be below or
shall fall below the standard variable rate of interest set by such
successors or assigns or those deriving title from them).
7.4 The Seller hereby undertakes to the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee and the Funding 2 Security Trustee
that:
(a) if the long term unsecured, unsubordinated and unguaranteed debt
obligations of the Seller cease to be assigned a rating of Baa2 or
higher from Moody's and BBB or higher from S&P and BBB or higher
from Fitch, the Seller shall deliver to the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee, the Funding
2 Security Trustee and the Rating Agencies a draft letter of
notice to each of the Borrowers of the sale and purchase effected
by this Agreement; and
(b) if the long term unsecured, unsubordinated and unguaranteed debt
obligations of the Seller cease to be assigned a rating of Baa3 or
higher from Moody's and BBB- or higher from S&P and BBB- or higher
from Fitch, then the Seller shall, within 20 London Business Days
of it becoming aware of such a rating being assigned, give notice
of the sale and purchase effected by this Agreement to each
Borrower.
7.5 The Seller undertakes to the Mortgages Trustee, Funding 1, Funding 2, the
Funding 1 Security Trustee and the Funding 2 Security Trustee that,
pending perfection under CLAUSE 6, the Seller:
(a) shall not do or omit to do any act or thing which might, in the
reasonable opinion of the Funding 1 Security Trustee and the
Funding 2 Security Trustee, prejudice the interests of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee in the Portfolio;
(b) shall promptly notify the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee and the Funding 2 Security Trustee
in writing if it receives written notice of any litigation or
claim calling into question in any material way the Seller's or
the Mortgages Trustee's title to any Loan comprised in the
Portfolio or its Related Security or if it becomes aware of any
material breach of any of the Representations and Warranties or
other obligations under this Agreement;
(c) shall, if reasonably required so to do by the Mortgages Trustee,
the Funding 1 Security Trustee or the Funding 2 Security Trustee,
participate or join in any legal proceedings to the extent
necessary to protect preserve and enforce the Seller's, the
Mortgages Trustee's, Funding 1's, Funding 2's, the Funding 1
Security Trustee's and/or the Funding 2 Security Trustee's title
to or interest in any Loan or its Related Security;
14
(d) shall use all reasonable endeavours to obtain as soon as
reasonably possible:
(i) the title number to each Property in respect of which a
Mortgage is registered at the Land Registry to the extent
that such title number does not appear in the Exhibit to
this Agreement (or, as the case may be, the relevant New
Portfolio Notice); and
(ii) the title number to each Property in respect of which a
Mortgage is registered in the Land Register of Scotland to
the extent that such title number does not appear in the
Exhibit to this Agreement (or, as the case may be, the
relevant New Portfolio Notice); and
(e) shall make and enforce claims under the Buildings Policies and the
Halifax Insurance Policies and hold the proceeds of such claims on
trust for the Mortgages Trustee or as the Mortgages Trustee may
direct.
7.6 The Seller hereby further undertakes to the Mortgages Trustee, Funding 1
and Funding 2 that it is and at all times shall remain solely responsible
for funding any Delayed Cashbacks, any Home Cash Reserve Drawings and
Flexible Loan Drawings (if any) made by a Borrower and for funding any
request for any Further Advance made by a Borrower and, for the avoidance
of doubt, none of the Mortgages Trustee, Funding 1 or Funding 2 will be
required to advance moneys to the Seller or to a Borrower in order to
fund such a Delayed Cashback, Home Cash Reserve Drawing, Flexible Loan
Drawing (if any), or Further Advance in any circumstances whatsoever.
7.7 The Seller shall grant security powers of attorney to the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee in the form set out in SCHEDULE 5 allowing any
of the Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee and the Funding 2 Security Trustee and their delegates from time
to time (inter alia) to set the Seller's Variable Base Rate in the
circumstances referred to in CLAUSE 4 of the Servicing Agreement and/or
following perfection pursuant to CLAUSE 6.1 PROVIDED THAT nothing in this
CLAUSE 7.7 shall prevent the Seller (or any of its attorneys from time to
time) from setting a higher Seller's Variable Base Rate than those set or
to be set or required or to be required by the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee or the Funding 2 Security
Trustee.
8. WARRANTIES AND REPURCHASE BY THE SELLER
8.1 (a) The Seller hereby makes the Representations and Warranties:
(i) in respect of each Loan and its Related Security in the
Initial Portfolio as at 14 June 2002 and on the Initial
Closing Date; and
(ii) in relation to each New Loan and its Related Security in a
New Portfolio, on the date of the service of the relevant
New Portfolio Notice and on the relevant Sale Date.
(b) Each statement comprised in the Representations and Warranties
shall be construed as a separate statement and (save as expressly
provided to the contrary) shall not be limited or restricted by
reference to or inference from the terms of any other such
statement.
(c) The Seller acknowledges:
(i) that the Representations and Warranties are made with a
view to inducing the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee and the Funding 2
Security Trustee (as the case may be) either to enter into
this Agreement and the other Transaction Documents to which
is a party or to agree to purchase the New Loans and their
Related Security comprised in each New Portfolio, and
15
(ii) that each of the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee and the Funding 2 Security
Trustee has entered into this Agreement and the other
Transaction Documents to which it is a party in reliance
upon the Representations and Warranties notwithstanding any
information in fact possessed or discoverable by the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee and/or the Funding 2 Security Trustee or
otherwise disclosed to any of them, and
(iii) that prior to entering into this Agreement and the other
Transaction Documents to which each is a party none of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee has made
any enquiries of any matter.
8.2 The Mortgages Trustee's, Funding 1's, Funding 2's, the Funding 1 Security
Trustee's and the Funding 2 Security Trustee's sole remedy in respect of
a breach of any of the Representations and Warranties shall be to take
action under this CLAUSE 8 or under CLAUSE 8.4 of the Mortgages Trust
Deed.
8.3 In the event of a material breach of any of the Representations or
Warranties in respect of any Loan and/or its Related Security made under
CLAUSE 8.1 or if any of those Representations or Warranties proves to be
materially untrue as at the Initial Closing Date or, as the case may be,
the relevant Sale Date, and provided that:
(a) the Mortgages Trustee (acting on the directions of Funding 1 and
Funding 2 given in accordance with the Controlling Beneficiary
Deed) has given the Seller not less than 20 London Business Days'
notice in writing (or such shorter period of notice as may be
agreed between the Mortgages Trustee and the Seller);
(b) the Mortgages Trustee has obtained the prior written consent of
the Funding 1 Security Trustee and the Funding 2 Security Trustee;
and
(c) such breach or untruth, where capable of remedy, is not remedied
to the reasonable satisfaction of Funding 1 and Funding 2 (acting
in accordance with the Controlling Beneficiary Deed), the Funding
1 Security Trustee and the Funding 2 Security Trustee within the
20 London Business Days period referred to in (a) (or such longer
period as Funding 1 and Funding 2 (acting in accordance with the
terms of the Controlling Beneficiary Deed), the Funding 1 Security
Trustee and the Funding 2 Security Trustee may direct the
Mortgages Trustee in writing),
then at the direction of Funding 1 and Funding 2 (given in accordance
with the Controlling Beneficiary Deed) and subject to the prior written
consent of the Funding 1 Security Trustee and the Funding 2 Security
Trustee, the Mortgages Trustee shall serve upon the Seller a notice in
the form of the Loan Repurchase Notice requiring the Seller to repurchase
the relevant Loan and its Related Security (and any other Loan secured or
intended to be secured by that Related Security or any part of it) in
accordance with CLAUSE 8.5.
8.4 (a) If the Seller accepts an application from, or makes an offer
(which is accepted) to, a Borrower for a Further Advance or a
Home Cash Reserve Advance then (save in the case of any Loan
which is then in arrears), at the direction of Funding 1 and
Funding 2 given in accordance with the Controlling Beneficiary
Deed (subject to the prior written consent of the Funding 1
Security Trustee and the Funding 2 Security Trustee), the
Mortgages Trustee will serve upon the Seller a notice in the form
of the Loan Repurchase Notice requiring the Seller to repurchase
the relevant Loan and its Related Security (and any other Loan
secured or intended to be secured by that Related Security or any
part of it) in accordance with CLAUSE 8.5.
16
(b) If the Seller accepts an application from, or makes an offer
(which is accepted) to, a Borrower for a Product Switch and
(except as provided in PARAGRAPH (C) below) on the immediately
preceding Distribution Date, the Seller is in breach of the
conditions referred to in CLAUSES 4.2(A) to (P) inclusive as if
references therein to NEW LOANS and NEW PORTFOLIO were references
to the Loan which would result from the implementation of such
Product Switch and as if references to SALE DATE were references
to the date when the Seller and relevant Borrower complete such
Product Switch then (save in the case of any Loan which is then in
arrears) from and including the relevant Distribution Date to but
excluding the date when such conditions have been satisfied, at
the direction of Funding 1 and Funding 2 given in accordance with
the Controlling Beneficiary Deed (subject to the prior written
consent of the Funding 1 Security Trustee and the Funding 2
Security Trustee), the Mortgages Trustee will serve upon the
Seller a notice in the form of the Loan Repurchase Notice
requiring the Seller to repurchase the relevant Loan and its
Related Security (and any other Loan secured or intended to be
secured by that Related Security or any part of it) in accordance
with CLAUSE 8.5.
(c) If the Seller accepts an application from, or makes an offer
(which is accepted) to, a Borrower for a Product Switch, the
effect of which is to extend the final maturity date of the
relevant Loan beyond [June 2040] then, at the direction of Funding
1 and Funding 2 given in accordance with the Controlling
Beneficiary Deed (subject to the prior written consent of the
Funding 1 Security Trustee and the Funding 2 Security Trustee),
the Mortgages Trustee will serve upon the Seller a notice in the
form of the Loan Repurchase Notice requiring the Seller to
repurchase the relevant Loan and its Related Security in
accordance with CLAUSE 8.5 notwithstanding that the conditions
referred to in CLAUSES 4.2(A) to 4.2(Q) have been satisfied.
(d) For the avoidance of doubt, the Seller shall not accept an
application from nor make an offer (which is accepted) to a
Borrower for a Further Advance, a Home Cash Reserve Advance or a
Product Switch if the relevant Loan to which such Further Advance,
Home Cash Reserve Advance or Product Switch relates is then in
arrears subject only to such exceptions as made on a case by case
basis as would be acceptable to a Reasonable, Prudent Mortgage
Lender provided that the Seller shall not so act if it would
result in the Issuer, Funding 1, Funding 2 or the Mortgages
Trustee arranging or advising in respect of, administering
(servicing) or entering into a regulated mortgage contract or
agreeing to carry on any of these activities, if the Issuer,
Funding 1, Funding 2 or the Mortgages Trustee would be required to
be authorised under the FMSA to do so.
8.5 Upon receipt of a Loan Repurchase Notice substantially in the form set
out in Schedule 6 duly signed on behalf of the Mortgages Trustee, the
Seller shall sign and return a duplicate copy and shall repurchase from
the Mortgages Trustee, and the Mortgages Trustee shall re-assign or
re-transfer to the Seller free from the Security Interests created by the
Funding 1 Deed of Charge and the Second Supplemental Funding 1 Deed of
Charge and any other supplement to the Funding 1 Deed of Charge, the
Funding 2 Deed of Charge and any supplement to the Funding 2 Deed of
Charge, the relevant Loan (and any other Loan secured or intended to be
secured by that Related Security or any part of it) and their Related
Security. Completion of such repurchase shall take place on the
Distribution Date after receipt by the Seller of such Loan Repurchase
Notice or such other date as the Mortgages Trustee may direct in the Loan
Repurchase Notice (provided that the date so specified by the Mortgages
Trustee shall not be later than 90 days after receipt by the Seller of
such notice) when the Seller shall pay to the Mortgages Trustee GIC
Account (or as the Mortgages Trustee shall direct) an amount equal to the
aggregate Outstanding Principal Balance of such Loan or Loans and any
Related Security and all Arrears of Interest and Accrued Interest
relating thereto (save for the repurchase of any Loan and its Related
Security which is subject to a Further Advance, a Home Cash Reserve
Advance or a Product Switch pursuant to CLAUSE 8.4 in which case the
Seller shall pay to
17
the Mortgages Trustee GIC Account (or as the Mortgages Trustee shall
direct) an amount equal to the aggregate Outstanding Principal Balance of
such Loan and its Related Security and Accrued Interest relating thereto
only) as at the date of such repurchase and the provisions of CLAUSE 8.6
shall apply.
8.6 On the date of completion of any repurchase of a Loan and its Related
Security in accordance with CLAUSE 8.5 above, the Funding 1 Security
Trustee, the Funding 2 Security Trustee, the Mortgages Trustee, Funding 1
and Funding 2 shall at the cost of the Seller execute and deliver, or
cause their respective duly authorised attorneys to execute and deliver,
to the Seller:
(a) a memorandum of release of such Loan and its Related Security from
the security constituted by the Funding 1 Deed of Charge, the
Second Supplemental Funding 1 Deed of Charge and any other
supplement to the Funding 1 Deed of Charge, the Funding 2 Deed of
Charge and any supplement to the Funding 2 Deed of Charge
substantially in the form set out in SCHEDULE 16;
(b) in relation to the English Mortgages, if perfection of the
assignment to the Mortgages Trustee has occurred in accordance
with CLAUSE 6:
(i) if the relevant English Mortgage is over Registered Land, a
transfer of such Mortgage to the Seller in the form of the
Registered Transfer; or
(ii) if the relevant English Mortgage is over Unregistered Land,
a transfer of such English Mortgage to the Seller in the
form of the Unregistered Transfer;
(c) in relation to the Scottish Mortgages, if perfection of the
assignation to the Mortgages Trustee has occurred in accordance
with CLAUSE 6:
(i) if the relevant Scottish Mortgage is over a Property title
to which is registered in the Land Register of Scotland, a
transfer by the Mortgages Trustee in favour of the Seller
in a form substantially similar to an SLR Transfer; and
(ii) if the relevant Scottish Mortgage is over a Property title
to which is recorded in the General Register of Sasines, a
transfer by the Mortgages Trustee in favour of the Seller
in a form substantially similar to a Sasine Transfer;
(d) a re-assignment or retrocession (as appropriate) of the rights of
the Mortgages Trustee in respect of the relevant Related Security
and a notice of such re-assignment or retrocession (as
appropriate) each in a form reasonably acceptable to the Seller
(which shall, in the case of the re-assignment of the MIG Policies
and notice of such re-assignment, be substantially in the form set
out in SCHEDULE 17 and SCHEDULE 18 hereto respectively and in the
case the re-assignment of rights against third parties, be
substantially in the form set out in SCHEDULE 19); and
(e) a notification to the Servicer that all further sums due in
respect of such repurchased Loan are for the Seller's account.
Upon such completion the Seller shall cease to be under any further
obligation to hold any Title Deeds or other documents relating to such
Loan or Loans and its/their Related Security to the order of the
Mortgages Trustee and if the Mortgages Trustee holds the Title Deeds it
will return them to the Seller. Any repurchase by the Seller of or in
respect of a Loan or Loans and its or their Related Security shall
constitute a discharge and release of the Seller from any claims which
the Mortgages Trustee and/or Funding 1 and/or Funding 2 and/or the
Funding 1 Security Trustee and/or the Funding 2 Security Trustee may have
against the Seller arising from the relevant Representation or
18
Warranty in relation to that Loan or Loans and its or their Related
Security only but shall not affect any rights arising from a breach of
any other express provision of this Agreement or any Representation or
Warranty in relation to any other Loan and other Related Security.
8.7 After the Seller becomes aware of any event and/or fact which may
reasonably give rise to an obligation under any clause of this Agreement
to repurchase any Loan it shall notify the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee in writing thereof as soon as reasonably practicable.
8.8 The terms of this CLAUSE 8 shall not prejudice the rights of the
Mortgages Trustee or the Beneficiaries under the Mortgages Trust Deed.
8.9 The parties to this Agreement may, with the prior written consent of the
Funding 1 Security Trustee and the Funding 2 Security Trustee, waive or
amend the Representations and Warranties. In determining whether to give
its consent to the proposed waiver or amendments to the Representations
and Warranties, each of the Funding 1 Security Trustee and the Funding 2
Security Trustee shall exercise its discretion in accordance with the
terms of CLAUSE 25.8 of the Funding 1 Deed of Charge and the terms of
CLAUSE 24.8 of the Funding 2 Deed of Charge.
9. OTHER WARRANTIES
On the date of this Agreement, each Closing Date, and each Sale Date, the
Seller represents and warrants to each of the Mortgages Trustee, Funding
1, Funding 2 (on and after the Programme Date), the Funding 1 Security
Trustee and the Funding 2 Security Trustee (on and after the Programme
Date) that:
(a) the Seller has not acquired or owned or possessed any rights in
any Funding 1 Issuer, the Master Issuer, the Mortgages Trustee,
Funding 1 or Funding 2 such that it would CONTROL any of Funding
1, Funding 2, the Master Issuer or any Funding 1 Issuer within the
meaning of Section 416 ICTA; and
(b) there is not any CONNECTION (within the meaning of Section 87
Finance Act 1996) between (i) any Funding 1 Issuer, the Master
Issuer, Funding 1 and/or Funding 2 and (ii) any Borrower.
10. FURTHER ASSURANCE
The parties hereto agree that they will co-operate fully to do all such
further acts and things and execute any further documents that may be
necessary or desirable to give full effect to the transactions
contemplated by this Agreement (but subject always to CLAUSE 6).
11. CONSEQUENCES OF BREACH
Without prejudice to CLAUSES 7 and 8, Funding 1, Funding 2, the Mortgages
Trustee, the Funding 1 Security Trustee and the Funding 2 Security
Trustee severally acknowledge to and agree with the Seller, and each of
the Funding 1 Security Trustee and the Funding 2 Security Trustee
acknowledges to and agrees with Funding 1, Funding 2 and the Mortgages
Trustee, that the Seller shall have no liability or responsibility
(whether, in either case, contractual, tortious or delictual, express or
implied) for any loss or damage for or in respect of any breach of, or
any act or omission in respect of, any of its obligations hereunder other
than loss or damage directly (and not indirectly or consequentially)
suffered by the Mortgages Trustee and/or Funding 1 and/or Funding 2 or
the assets comprised in the Funding 1 Security constituted by the Funding
1 Deed of Charge and the Funding 2 Security constituted by the Funding 2
Deed of Charge respectively by reason of such breach, act or omission.
For this purpose (and without limiting the scope of the above exclusion
in respect of
19
indirect or consequential loss or damage) any loss or damage suffered by
the Mortgages Trustee and/or Funding 1 and/or Funding 2 or such assets as
a result of the breach, act or omission in question also having been or
given rise to an Intercompany Loan Event of Default and/or a Master
Intercompany Loan Event of Default or enforcement of the Funding 1
Security constituted by the Funding 1 Deed of Charge and/or the Funding 2
Security constituted by the Funding 2 Deed of Charge shall be treated as
indirect or consequential loss or damage PROVIDED THAT this sentence
shall not apply to any direct or non-consequential loss or damage arising
from any such breach, act or omission.
12. SUBORDINATION
The Seller agrees with Funding 1, Funding 2, the Mortgages Trustee, the
Funding 1 Security Trustee and the Funding 2 Security Trustee that on the
enforcement of any Mortgage any sums owed to the Seller by a Borrower and
which are secured under such Mortgage and the rights and remedies of the
Seller in respect of the sums owed to the Seller shall at all times be
subject and subordinated to any sums owed to the Mortgages Trustee by the
Borrower and which are secured under such Mortgage and to the rights and
remedies of the Mortgages Trustee in respect of such sums owed to the
Mortgages Trustee by the Borrower.
13. NON?MERGER
Any term of this Agreement to which effect is not given on the Initial
Closing Date or on any Sale Date (including in particular, but without
limitation, the liability of the Seller under the Representations and
Warranties and the indemnity in CLAUSE 6.7 and the provisions of CLAUSE
4) shall not merge and shall remain in full force and effect
notwithstanding the sale and purchases contemplated by this Agreement.
14. NO AGENCY OR PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any relationship of
agency, save as expressly provided herein, or partnership between the
parties and that in fulfilling its obligations hereunder, each party
shall be acting entirely for its own account.
15. PAYMENTS
Except as otherwise specifically provided, all payments to be made
pursuant to this Agreement shall be made in sterling in immediately
available funds without exercising or seeking to exercise any right of
set-off as may otherwise exist and shall be deemed to be made when they
are received by the payee and shall be accounted for accordingly unless
failure to receive any payment is due to an error by the payee's bank.
16. WAIVER AND VARIATION
16.1 Exercise or failure to exercise any right under this Agreement shall not,
unless otherwise herein provided, constitute a waiver of that or any
other right.
16.2 Subject to CLAUSE 25 of the Funding 1 Deed of Charge and CLAUSE 24 of the
Funding 2 Deed of Charge any amendments to this Agreement will be made
only with the prior written consent of each party to this Agreement.
20
17. NOTICES
Any notices to be given pursuant to this Agreement to any of the parties
hereto shall be in writing and 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 (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 Halifax plc, ▇▇▇▇▇▇▇ ▇▇▇▇
(▇▇/▇/▇/▇▇▇), ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number
▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇) for the attention of the Head of Mortgage
Securitisation with a copy to HBOS Treasury Services PLC, ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number +44 (0)20 7574
8303) for the attention of Head of Mortgage Securitisation and
Covered Bonds;
(b) in the case of Funding 1: to Permanent Funding (No. 1) Limited, ▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number +44 (0)20
7398 6325) for the attention of the Secretary with a copy to HBOS
Treasury Services PLC, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(facsimile number ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(c) in the case of Funding 2: to Permanent Funding (No. 2) Limited, ▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number +44 (0)20
7398 6325) for the attention of the Secretary with a copy to HBOS
Treasury Services PLC, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(facsimile number ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(d) in the case of the Mortgages Trustee: to Permanent Mortgages
Trustee Limited, ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
(facsimile number ▇▇▇ (▇) ▇▇▇▇ ▇▇▇▇▇▇) for the attention of the
Secretary with a copy to HBOS Treasury Services PLC, ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇) for
the attention of Head of Mortgage Securitisation and Covered
Bonds; and
(e) in the case of the Funding 1 Security Trustee and the Funding 2
Security Trustee: to The Bank of ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number + ▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇/6399) for
the attention of Global Structural Finance - Corporate Trust,
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 17.
18. ASSIGNMENT
18.1 Subject always to the provisions of CLAUSE 19, no party hereto shall be
entitled to assign all or any part of its rights or obligations hereunder
to any other party without the prior written consent of each of the other
parties hereto (which shall not, if requested, be unreasonably withheld)
save that Funding 1 and Funding 2 shall be entitled to assign whether by
way of security or otherwise all or any of its rights under this
Agreement without such consent to:
(a) in the case of Funding 1, the Funding 1 Security Trustee pursuant
to the Funding 1 Deed of Charge; and
(b) in the case of Funding 2, the Funding 2 Security Trustee pursuant
to the Funding 2 Deed of Charge,
21
and each of the Funding 1 Security Trustee and the Funding 2 Security
Trustee may at its sole discretion assign all or any of its rights under
or in respect of this Agreement without such consent to any successor
security trustee in exercise of its rights under the Funding 1 Deed of
Charge or the Funding 2 Deed of Charge (as applicable).
18.2 The Seller acknowledges that on the assignment pursuant to the Funding 1
Deed of Charge by Funding 1 to the Funding 1 Security Trustee of Funding
1's rights under this Agreement and pursuant to the Funding 2 Deed of
Charge by Funding 2 to the Funding 2 Security Trustee of Funding 2's
rights under this Agreement, each of the Funding 1 Security Trustee and
the Funding 2 Security Trustee may enforce such rights in its own name
without joining Funding 1 or Funding 2 (as applicable) in any such action
(which right the Seller hereby waives) and the Seller hereby waives as
against the Funding 1 Security Trustee and the Funding 2 Security Trustee
any rights or equities in its favour arising from any course of dealing
between the Seller, Funding 1 and Funding 2.
19. CHANGE OF FUNDING 1 SECURITY TRUSTEE AND/OR FUNDING 2 SECURITY TRUSTEE
19.1 If there is any change in the identity of the Funding 1 Security Trustee
or the Funding 2 Security Trustee in accordance with the Funding 1 Deed
of Charge or the Funding 2 Deed of Charge (as applicable), the Seller,
the Mortgages Trustee, Funding 1 and/or Funding 2 shall execute such
documents and take such action as the successor Funding 1 Security
Trustee or successor Funding Security Trustee (as applicable) and the
outgoing Funding 1 Security Trustee or outgoing Funding 2 Security
Trustee (as applicable) may reasonably require for the purpose of vesting
in the successor Funding 1 Security Trustee or successor Funding 2
Security Trustee (as applicable) the rights and obligations of the
outgoing Funding 1 Security Trustee or outgoing Funding 2 Security
Trustee (as applicable) hereunder and releasing the outgoing Funding 1
Security Trustee or outgoing Funding 2 Security Trustee (as applicable)
from its future obligations under this Agreement and the Seller shall
give notice thereof to the Rating Agencies.
19.2 It is hereby acknowledged and agreed that by their execution of this
Agreement, neither the Funding 1 Security Trustee nor the Funding 2
Security Trustee shall not assume or have any of the obligations or
liabilities of the Seller or Funding 1 or Funding 2 or the Mortgages
Trustee hereunder.
20. NOT USED
21. THIRD PARTY RIGHTS
A person who is not a party to this agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
22. EXECUTION IN COUNTERPARTS; SEVERABILITY
22.1 This Agreement may be executed in any number of counterparts (manually or
by facsimile) and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same
instrument.
22.2 Where any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations
under this Agreement, or of such provision or obligation in any other
jurisdiction shall not be affected or impaired thereby.
22
23. GOVERNING LAW
23.1 This Agreement shall be governed by the laws of England (provided that
any terms of this Agreement which are particular to Scots law shall be
construed in accordance with the laws of Scotland).
23.2 Each party to this Agreement hereby irrevocably submits to the
non-exclusive jurisdiction of the English courts in any action or
proceeding arising out of or relating to this Agreement, 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
Agreement 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. The Mortgages Trustee irrevocably appoints Structured Finance
Management Limited of ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ as its agent
for service of process.
23
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first before written.
SELLER
SIGNED by )
as attorney for )
HALIFAX PLC in the presence of )
Witness's Signature:
Name:
Address:
BENEFICIARY
SIGNED by )
as attorney for )
HALIFAX PLC in the presence of )
Witness's Signature:
Name:
Address:
BENEFICIARY
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED )
BENEFICIARY
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 2) LIMITED )
MORTGAGES TRUSTEE
SIGNED by )
for and on behalf of )
PERMANENT MORTGAGES )
TRUSTEE LIMITED )
24
FUNDING 1 SECURITY TRUSTEE
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK )
FUNDING 2 SECURITY TRUSTEE
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK )
25
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
1. LOANS
1.1 The particulars of the Loans set out in the Exhibit (or, as the case may
be, the relevant New Portfolio Notice and in each Scottish Declaration of
Trust) are true, complete and accurate in all material respects.
1.2 Each Loan was originated by the Seller and was originated and is
denominated in pounds sterling (or was originated and is denominated in
euro if the euro has been adopted as the lawful currency for the time
being of the United Kingdom).
1.3 Each Loan in the Portfolio as at the Programme Date was made not earlier
than 1st February, 1996 and not later than [30 September 2005].
1.4 Each Loan matures for repayment not later than [*].
1.5 No Loan has an Outstanding Principal Balance of more than [POUND]500,000.
1.6 The Lending Criteria are the lending criteria applicable to the Loans and
their Related Security.
1.7 Prior to the making of each Initial Advance and Further Advance:
(a) the Lending Criteria and all preconditions to the making of any
Loan were satisfied in all material respects subject only to such
exceptions as made on a case by case basis as would be acceptable
to a Reasonable, Prudent Mortgage Lender; and
(b) the requirements of the relevant MIG Policy were met, so far as
applicable to that Loan.
1.8 (a) Each Loan was made and its Related Security taken or received
substantially on the terms of the Standard Documentation without
any material variation thereto and nothing has been done
subsequently to add to, lessen, modify or otherwise vary the
express provisions of any of the same in any material respect.
(b) The brochures, application forms, offers, offer conditions and
marketing material distributed by the Seller to the Borrower when
offering a Loan to a Borrower:
(i) do not conflict in any material respect with the terms
applicable to the relevant Loan and its Related Security at
the time that the Loan was entered into;
(ii) do not conflict with and would not prohibit or otherwise
limit the terms of, the Transaction Documents or the
matters contemplated thereby, including for the avoidance
of doubt and without limitation:
(A) the assignment or assignation (as appropriate) of the
Loans and their Related Security to the Mortgages
Trustee or the placing of the Loans and their Related
Security into trust;
(B) the administration of the Loans and their Related
Security by the Servicer or a delegate or
sub-contractor of the Servicer or (for as long as the
Seller and the Servicer are the same legal entity)
the appointment of a new Servicer
26
following the occurrence of an Insolvency Event in
relation to the Seller; and
(C) so far as the Seller is aware to the best of its
knowledge, information and belief, the ability of the
Mortgages Trustee or the Security Trustee to set the
variable rate payable under any Variable Rate Loan
independently of (and without regard to the level of)
the Seller's standard variable rate of interest or if
the Seller has more than one standard variable rate
of interest, the relevant Seller's standard variable
rate of interest, subject to any applicable cap on
that variable rate which is not itself linked to any
rate set by the Seller and to set the variable margin
above the Bank of England repo rate under any Tracker
Rate Loan independently of (and without regard to the
level of) any differential set by the Seller, subject
to any applicable cap on that variable margin above
the Bank of England repo rate which is not itself
linked to any margin set by the Seller.
(c) There is no restriction on the Seller's successors and assigns and
assignees to the legal title of the Loans (including, without
limitation, the Mortgages Trustee if and when legal title to the
Loans is transferred to it) right:
(i) to set the variable rate payable under any Variable Rate
Loan independently of (and without regard to the level of)
the Seller's standard variable rate of interest or if the
Seller has more than one standard variable rate of
interest, the relevant Seller's standard variable rate of
interest, subject to any applicable cap on that variable
rate which is not itself linked to any rate set by the
Seller (subject to complying with the obligations under the
Standard Documentation as to changes in interest rates
generally and so that in particular the successors will not
be able to change the interest rate following a transfer of
legal title unless the reasons for changing the interest
rate set out in the Standard Documentation apply) and
provided that in relation to Loans which are subject to HVR
2, the differential between that rate and the Loans which
are subject to HVR 1 is maintained; and
(ii) to set the variable margin above the Bank of England repo
rate under any Tracker Rate Loan independently of (and
without regard to the level of) any differential set by the
Seller, subject to any applicable cap on that variable
margin above the Bank of England repo rate which is not
itself linked to any margin set by the Seller (subject to
complying with the obligations under the Standard
Documentation as to changes in margins generally and so
that in particular the successors will not be able to
change the margin following a transfer of legal title
unless the reasons for changing the margin set out in the
Standard Documentation apply).
1.9 The Seller is under no obligation to make Further Advances (other than
Flexible Loan Drawings (if any), Delayed Cashbacks and Home Cash Reserve
Drawings) or to release retentions or to pay fees or other sums relating
to any Loan or its Related Security to any Borrower.
1.10 Each Borrower has made at least two Monthly Payments in respect of each
Loan.
1.11 Other than with respect to monthly interest payments or as provided in
PARAGRAPH 1.12 below, no Borrower is or has, since the date of the
relevant Mortgage, been in material breach of any obligation owed in
respect of the relevant Loan or under the Related Security and
accordingly no steps have been taken by the Seller to enforce any Related
Security.
1.12 The total amount of arrears of interest or principal, together with any
fees, commissions and premiums payable at the same time as such interest
payment or principal repayment, on any Loan is
27
not on the relevant Sale Date in respect of any Loan, nor has been during
the 12 months immediately preceding the relevant Sale Date more than the
amount of the Monthly Payment then due.
1.13 No Loan is guaranteed by a third party save where the guarantee
constitutes legal, valid and binding obligations of the guarantor
enforceable in accordance with their terms.
1.14 Each Flexible Loan was originated not earlier than [1 November 2004] [and
was made under the 2004 Mortgage Conditions (2nd Edition).]
1.15 Interest on each Loan is charged in accordance with the Standard
Documentation.
1.16 Interest on each Loan is payable monthly in arrear.
1.17 Each Loan and its Related Security is valid, binding and enforceable in
accordance with its terms and is non-cancellable:
(a) save in relation to any term in any Loan or in its Related
Security, in each case which is not binding by virtue of the
Unfair Terms in Consumer Contracts Regulations 1994 or (as the
case may be) the Unfair Terms in Consumer Contracts Regulations
1999; and
(b) save in relation to any amount advanced under a Flexible Loan, any
Delayed Cashback, any Home Cash Reserve Drawing and any other
Further Advance, in each case which is not enforceable by virtue
of the Consumer Credit ▇▇▇ ▇▇▇▇.
1.18 To the best of the Seller's knowledge, none of the terms in any Loan or
in its Related Security is not binding by virtue of its either (i) being
unfair within the meaning of the Unfair Terms in Consumer Contracts
Regulations 1994 or (as the case may be) the Unfair Terms in Consumer
Contracts Regulations 1999 or (ii) not being compliant with the terms of
the Consumer Credit ▇▇▇ ▇▇▇▇. In this WARRANTY 1.17, reference to any
legislation shall be construed as a reference to that legislation as
amended, extended or re-enacted from time to time.
1.19 All of the Borrowers are individuals and were aged 18 years or older at
the date he or she executed the relevant Mortgage.
1.20 At least two Monthly Payments have been made in respect of each Loan.
1.21 Each loan in the relevant Portfolio is either:
(a) a Variable Rate Loan, Tracker Rate Loan or Fixed Rate Loan; or
(b) a New Loan Type which each of the Rating Agencies has confirmed in
writing may be included in the relevant New Portfolio.
2. MORTGAGES
2.1 The whole of the Outstanding Principal Balance on each Loan and any
Arrears of Interest and all Accrued Interest is secured by a Mortgage.
2.2 Each Mortgage is in the form of the pro forma contained in the Standard
Documentation which was applicable at the time the Mortgage was executed.
2.3 Each Mortgage constitutes a valid and subsisting first charge by way of
legal mortgage or (in the case of Scottish Mortgages) first ranking
standard security over the relevant Property subject only in certain
appropriate cases to applications for registration or recording at the
Land Registry or Registers of Scotland which where requisite have been
made and are pending and in relation to such
28
cases the Seller is not aware of any caution, notice, inhibition or any
other matter that would prevent such registration or recording.
2.4 Each Mortgage has first priority for the whole of the Outstanding
Principal Balance on the Loan and all Arrears of Interest and Accrued
Interest thereon and all future interest, fees, costs and expenses
payable under or in respect of such Mortgage.
2.5 The Seller has and will maintain, all consents, authorisations,
approvals, licences and orders, including without limitation all
authorisations under the FSMA requirements to originate, advise upon and
administer the Loans and Mortgages.
2.6 The Seller has complied and will comply, in all material respects, with
all applicable laws and regulations, including without limitation the
FSA's rules in MCOB, in respect of its advisory activities relating to,
and the origination and administration of the Loans and Mortgages.
2.7 Each Mortgage in respect of a RTB Loan was made to a Borrower for the
purposes of exercising the right-to-buy or for another approved purpose
(save where a Deed of Postponement has been entered into by the relevant
landlord) and has (or the Seller has the evidence necessary to ensure
that the relevant Mortgage will have) priority over any statutory charge
or standard security granted in favour of the relevant landlord save in
cases where the Mortgage is originated at a time where there is no more
than one year remaining of the RTB Disposal Period or where adequate
insurance is in place.
2.8 The Seller has complied and will comply, in all material respects, with
all applicable laws and regulations including, without limitation, the
ICOB with regard to any insurance related activities in respect of the
Properties.
2.9 Each intermediary who has introduced a Loan to the Seller was, at the
time of the relevant introduction and insofar as required, registered
with the Mortgage Code Register of Intermediaries, the Mortgage Code
Compliance Board or, if the Loan was originated after 31 October 2004,
authorised by the FSA.
3. THE PROPERTIES
3.1 All of the Properties are in England, Wales or Scotland.
3.2 Each Property constitutes a separate dwelling unit (subject to limited
case by case exceptions) and is either freehold, leasehold or (in
Scotland) heritable or held under a long lease.
3.3 Save for children of Borrowers and children of someone living with the
Borrower, every person who, at the date upon which any English Mortgage
was granted, had attained the age of eighteen and was in or about to be
in actual occupation of the relevant Property, is either named as a
Borrower or has signed a Deed of Consent in the form of the pro forma
contained in the Standard Documentation which was applicable at the time
the Mortgage was executed.
3.4 At the date upon which any Scottish Mortgage was granted all necessary
MHA Documentation had been obtained so as to ensure that neither that
Scottish Mortgage nor the related Property is subject to or affected by
any statutory right of occupancy under the Matrimonial Homes (Family
Protection) (Scotland) ▇▇▇ ▇▇▇▇ or the Civil Partnership ▇▇▇ ▇▇▇▇.
3.5 No Property has been let otherwise than by way of:
(a) an assured shorthold tenancy which meets the requirements of
Section 19A or Section 20 of the Housing ▇▇▇ ▇▇▇▇; or
29
(b) a short assured tenancy which meets the requirements of section 32
of the Housing (Scotland) ▇▇▇ ▇▇▇▇; or
(c) an assured tenancy;
in each case which meets the Seller's Policy in connection with lettings
to non-owners.
3.6 No Property is the subject of a shared ownership lease arrangement or
staircase purchasing arrangement.
4. VALUERS' AND SOLICITORS' REPORTS
4.1 Not more than twelve months (or a longer period (including in the case of
an inter-group remortgage) as may be acceptable to a Reasonable, Prudent
Mortgage Lender) prior to the grant of each Mortgage (or such longer
period (including in the case of an inter-group remortgage) as may be
acceptable to a Reasonable, Prudent Mortgage Lender) the Seller received
a Valuation Report from a Valuer on the relevant Property (or such other
form of report concerning the valuation of the relevant Property as would
be acceptable to a Reasonable, Prudent Mortgage Lender), the contents of
which were such as would be acceptable to a Reasonable, Prudent Mortgage
Lender.
4.2 The principal amount of the Initial Advance (including any retention(s)
subsequently advanced to the Borrower but disregarding Capitalised
Expenses) is either:
(a) not more than 75 per cent. of the lower of the purchase price and
the appraised value of the Property as stated in the Valuation
Report referred to above in PARAGRAPH 4.1 (the APPRAISED VALUE)
(or, in case of a remortgage, of the appraised value) of the
Property; or
(b) greater than 75 per cent. (but not more than 97 per cent.) of the
lower of the purchase price and the appraised value (or, in the
case of a remortgage, of the appraised value), in which case for
those Loans originated prior to 1 January 2001 only that part of
the Initial Advance which exceeds 75 per cent. of the lower of the
purchase price and the appraised value (or, in the case of a
remortgage, of the appraised value) is covered under the terms of
a MIG Policy.
4.3 Prior to the taking of each Mortgage (other than a remortgage), the
Seller:
(a) instructed the Seller's solicitor, licensed conveyancer or (in
Scotland) qualified conveyancer to carry out an investigation of
title to the relevant Property and to undertake such other
searches, investigation, enquiries and other actions on behalf of
the Seller as are set out in the instructions which the Seller
issued to the relevant solicitor as are set out in:
(i) the CML's Lenders' Handbook for England and Wales in
relation to English Mortgages;
(ii) the Seller's Mortgage Practice Notes in relation to
Scottish Mortgages taken before the CML's Lenders' Handbook
for Scotland was adopted in 2000; or
(iii) the CML's Lenders' Handbook for Scotland in relation to
Scottish Mortgages taken after the CML's Lenders' Handbook
for Scotland was adopted in 2000,
(iv) (or such comparable, predecessor or successor instructions
and/or guidelines as may for the time being be in place),
subject only to such variations made on a case by case
basis as would have been acceptable to a Reasonable,
Prudent Mortgage Lender at the relevant time; or
30
(b) received a Certificate of Title from the solicitor or licensed
conveyancer or (in Scotland) qualified conveyancer referred to in
PARAGRAPH (A) relating to such Property the contents of which were
such as would have been acceptable to a Reasonable, Prudent
Mortgage Lender at that time.
4.4 The benefit of all Valuation Reports, any other valuation report referred
to in PARAGRAPH 4.1 and Certificates of Title which were provided to the
Seller not more than two years prior to the date of this Agreement can be
validly assigned to the Mortgages Trustee without obtaining the consent
of the relevant Valuer, solicitor or licensed conveyancer or (in
Scotland) qualified conveyancer.
5. BUILDINGS INSURANCE
5.1 Each Property is insured under:
(a) a buildings insurance policy arranged by the Borrower in
accordance with the relevant Mortgage Conditions or in accordance
with the Alternative Insurance Recommendations; or
(b) the Halifax Policies; or
(c) a Seller-introduced building insurance policy; or
(d) a buildings insurance policy arranged by the relevant landlord; or
(e) the Properties in Possession Cover.
5.2 No act, event or circumstance has occurred which would adversely affect
the Properties in Possession Cover or entitle the insurers to refuse to
make payment thereunder or to reduce the amount payable in respect of any
claim thereunder.
5.3 All claims under the Properties in Possession Cover have been paid in
full within a reasonable time of the date of submission of the claim and,
save in respect of minor claims, there are no claims outstanding.
5.4 The Seller has maintained and will maintain all consents, authorisations,
approvals, licences and orders, including without limitation all
authorisations under the FSMA, to carry on any insurance related
activities in respect of the Properties.
6. MIG POLICIES
6.1 Where applicable, the MIG Policies are in full force and effect in
relation to the Initial Portfolio or, as the case may be, each New
Portfolio and all premiums thereon have been paid.
6.2 The benefit of the Halifax Mortgage Re Limited MIG Policies can be and
will have been, with effect from the Initial Closing Date or the relevant
Sale Date, as applicable, validly assigned to the Mortgages Trustee and
charged to the Funding 1 Security Trustee and, on and from the Programme
Date, the Funding 2 Security Trustee, insofar as they relate to the
Initial Portfolio or, as the case may be, each New Portfolio in each case
in the manner and to the extent contemplated by the Transaction
Documents.
6.3 To the best of the knowledge of the Seller no act, event or circumstance
has occurred which would adversely affect the MIG Policies or entitle the
insurers to refuse to make payment thereunder or to reduce the amount
payable in respect of any claim thereunder insofar as they relate to the
Initial Portfolio or, as the case may be, each New Portfolio.
31
6.4 All valid claims under the MIG Policies have been paid in full within a
reasonable time of the date of submission of the claim.
7. THE SELLER'S TITLE
7.1 The Seller has good title to, and is the absolute unencumbered legal and
beneficial owner of, all property, interests, rights and benefits agreed
to be sold and/or assigned by the Seller to the Mortgages Trustee
pursuant to this Agreement free and clear of all mortgages, charges,
liens, Encumbrances, claims and equities (including, without limitation,
rights of set-off or counterclaim and unregistered or overriding
interests which fall within any of the paragraphs of schedules 1 or 3 to
the Land Registration Act 2002 (as such schedules have effect in
accordance with section 90(5) and Schedule 12 of the Land Registration
Act 2002) or Section 28(1) of the Land Registration (Scotland) Act 1979
and the Seller is not in breach of any covenant implied by reason of its
selling the Portfolio with full title guarantee or absolute warrandice
(or which would be implied if the Registered Transfers, Unregistered
Transfers or Scottish Transfers, as applicable, were completed).
7.2 All steps necessary to perfect the Seller's title to the Loans and the
Related Security were duly taken at the appropriate time or are in the
process of being taken, in each case (where relevant) within any
applicable priority periods or time limits for registration with all due
diligence and without undue delay.
7.3 Save for Title Deeds held at the Land Registry or Registers of Scotland,
the Title Deeds and the Customer Files relating to each of the Loans and
their Related Security are held by, or are under the control of:
(a) the Seller; or
(b) the Seller's solicitors or licensed conveyancers or (in Scotland)
qualified conveyancers to the order of the Seller,
and the Title Deeds held at the Land Registry have been sent to it with a
request that any such Title Deeds will be returned to the Seller or its
solicitors on its behalf.
7.4 Neither the entry by the Seller into this Agreement nor any transfer,
assignment, assignation or creation of trust contemplated by this
Agreement affects or will adversely affect any of the Loans and their
Related Security (including, without limitation, the Insurance Policies)
and the Seller may freely assign and create a trust or trusts in respect
of all its rights, title, interests and benefits therein as contemplated
in this Agreement without breaching any term or condition applying to any
of them.
7.5 The Seller has not knowingly waived or acquiesced in any breach of any of
its rights in respect of a Loan or its Related Security, other than
waivers and acquiescence such as a Reasonable, Prudent Mortgage Lender
might make on a case by case basis.
8. GENERAL
8.1 The Seller has, since the making of each Loan, kept or procured the
keeping of full and proper accounts, books and records showing clearly
all transactions, payments, receipts, proceedings and notices relating to
such Loan.
8.2 Neither the Seller nor as far as the Seller is aware any of its agents
has received written notice of any litigation, claim, dispute or
complaint (in each case, subsisting, threatened or pending) in respect of
any Borrower, Property, Loan, Related Security, Halifax Policy, MIG
Policy or Properties in Possession Cover which (if adversely determined)
might have a material adverse effect on the Trust Property or any part of
it.
32
8.3 The Seller has received from each Borrower a variable direct debit
instruction in favour of the Seller signed by the relevant Borrower and
addressed to its bank, variable as to the amount payable by such Borrower
by unilateral notice given from time to time by the Seller to such
Borrower's bank without further instruction or consent from such Borrower
or such other method of payment as may be acceptable to a Reasonable,
Prudent Mortgage Lender.
8.4 There are no authorisations, approvals, licences, orders, notifications
or consents required as appropriate for the Seller to enter into or to
perform the obligations under this Agreement or to render this Agreement
legal, valid, binding, enforceable and admissible in evidence.
8.5 The Insurance Acknowledgements are valid, binding and enforceable against
the relevant insurer by the Mortgages Trustee, Funding 1 Security Trustee
and, on and from the Programme Date, the Funding 2 Security Trustee.
33
SCHEDULE 2
REGISTERED TRANSFER
IN THE FORM OF THE LAND REGISTRY FORM TR4 AS SHOWN OVERLEAF WITH SUCH
AMENDMENTS AS THE MORTGAGES TRUSTEE MAY REASONABLY REQUIRE TO GIVE EFFECT TO
THIS AGREEMENT OR IN SUCH OTHER FORM AS THE MORTGAGES TRUSTEE MAY REASONABLY
REQUIRE TO TAKE ACCOUNT OF CHANGES IN LAW OR PRACTICE.
34
SCHEDULE 3
UNREGISTERED TRANSFER
THIS DEED OF TRANSFER OF MORTGAGES is made the day of
BY:
(1) HALIFAX PLC whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter called the TRANSFEROR) of the one part;
and
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED whose registered office is ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter called the TRANSFEREE)
of the other part.
WHEREAS:
(A) By the charges by way of legal mortgage (the MORTGAGES) brief particulars
of which are set out in the Annexure hereto the properties brief
particulars of which are similarly set out became security for the
repayment of the monies therein mentioned.
(B) By a mortgage sale agreement (as amended and/or restated from time to
time) made between, inter alios, the Transferor and the Transferee on 14
June 2002 (as the same may be or have been amended, varied or
supplemented from time to time with the consent of the parties hereto,
the MORTGAGE SALE AGREEMENT), the Transferor agreed to sell and the
Transferee agreed to buy all right, title, interest, benefit and
obligation (both present and future) of the Transferor in and under those
Mortgages and all other mortgages in favour of the Transferor over such
properties which do not relate to registered land for the consideration
mentioned in the said Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
1. In consideration for the sums payable and other consideration indicated
under the Mortgage Sale Agreement (receipt of which is hereby
acknowledged), the Transferor hereby transfers unto the Transferee with
full title guarantee all rights, title, interests, benefits and
obligations (both present and future) of the mortgagee in and under the
Mortgages including for the avoidance of doubt:
(a) the right to demand, ▇▇▇ for, recover, receive and give receipts
for all principal moneys payable or to become payable under the
relevant Mortgages or the unpaid part thereof and the interest due
or to become due thereon;
(b) the benefit of all securities for such principal moneys and
interest, the benefit of all consents to mortgage signed by
occupiers of the mortgaged properties and the benefit of and the
right to ▇▇▇ on all covenants with, or vested in, the mortgagee in
relation to each Mortgage and the rights to exercise all powers of
the mortgagee in relation to each Mortgage;
(c) all the estate and interest in the relevant mortgaged properties
vested in the mortgagee subject to redemption or cesser; and
(d) all causes of action of the mortgagee against any person in
connection with any report, valuation, opinion, certificate,
consent to mortgage or other statement of fact or opinion given in
connection with any Mortgage or affecting the decision to make the
relevant advance.
35
2. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
HALIFAX PLC )
acting by its attorney in )
the presence of: ) __________________________
Witness's Signature: __________________________
Name: __________________________
Address: __________________________
36
ANNEX 1
Account No. Property address Date of Mortgage Borrower
37
SCHEDULE 4
LENDING CRITERIA
LENDING CRITERIA
The Loans in the Initial Portfolio or, as the case may be, the relevant New
Portfolio were originated according to the Seller's lending policy at the
applicable time the Loan was offered. At the Programme Date the Seller's
lending policy included the criteria set out below. However, the Seller retains
the right to revise its lending policy from time to time, and so the criteria
applicable to New Loans may not be the same as those set out below.
1. Types of Property
Properties may be either freehold, leasehold or (in Scotland) heritable
or held under a long lease. In the case of leasehold properties, the
unexpired portion of the lease must in most cases not expire earlier than
30 years after the term of the Loan. The property must be used solely for
residential purposes (with extremely limited case by case exceptions) and
must be in sound structural condition and repair or be capable of being
put into such state. House boats, mobile homes and any property on which
buildings insurance cannot be arranged are not acceptable. All persons
who are to be legal owners of the Property on completion of the relevant
Mortgage must be Borrowers.
All properties have been valued by a valuer approved by the Seller or,
where appropriate, according to a methodology which would meet the
standards of a Reasonable, Prudent Mortgage Lender and which has been
approved by the Seller.
2. Term of Loan
There is no minimum term on home purchase Loans and the maximum term is
40 years for all loans. A repayment period for a new Further Advance that
would extend beyond the term of the original advance may also be accepted
at the Seller's discretion, subject to the following:
(a) the consent of any subsequent lender or guarantor to the Further
Advance;
(b) the Seller may in its discretion extend the period of the original
advance, provided that, in all leasehold cases, not less than 30
years of the lease must be left unexpired at the end of the term
of the Mortgage; and
(c) the approval of the valuer where the valuer has previously
recommended a term which is shorter than the maximum Loan terms
referred to above.
If a Borrower requests to increase the term of the existing Loan, the
maximum term for a repayment Loan is 25 years from the date from which
the extended term is granted. However, the total term from the start date
of the account must not exceed 40 years.
If a Borrower or guarantor is already retired or a mortgage term is
requested that will take the Borrower/guarantor's term beyond the
anticipated retirement age, specific procedures must be followed by the
Seller.
3. Age of Applicant
All Borrowers must be aged 18 or over. There is no maximum age limit.
However, if the term of the Mortgage extends into retirement, the Seller
will attempt to ascertain the Borrower's anticipated
38
income in retirement. If the Seller determines the Borrower will not be
able to afford the Mortgage into retirement, the application will be
declined. If the Borrower is already retired, the Seller will consider
the Borrower's ability to support the Loan.
4. Loan to Value (or LTV) Ratio
The maximum original LTV ratio of Loans in the Initial Portfolio is 97
per cent. At the date of this Agreement, for Properties of [POUND]150,000
or less, the Seller may lend up to 97 per cent. of the improved valuation
of the Property (the original valuation plus the increase in value
deriving from any improvements). For Properties in excess of
[POUND]150,000, the permissible LTV ratio decreases as the property value
increases. The Seller will not provide Loans in excess of 100 per cent.
of the sum of the purchase price and the increase in value deriving from
any improvements.
All lending for new purchases is based on a maximum of 97 per cent. of
value, provided that this does not exceed 100 per cent. of the purchase
price. For example, if the value of a property was [POUND]100,000 and the
purchase price was [POUND]97,000, the maximum the Seller would lend is
[POUND]97,000.
5. Mortgage Indemnity Guarantee Policies/High LTV Fees
Borrowers are currently required to pay high LTV fees to the Seller for
each Mortgage account where the aggregate of the outstanding principal
balance of the relevant Loan(s) at origination (excluding any capitalised
high LTV fees and/or booking fees and/or valuation fees) exceeds certain
specified percentages.
If the LTV ratio exceeds 90 per cent., the Borrower pays high LTV fees
based on the difference between the actual LTV ratio and a 75 per cent.
LTV ratio.
Prior to 1 January 2001, the Seller required cover under mortgage
indemnity guarantee, or MIG, policies for Mortgages where the LTV ratio
exceeded 75 per cent., though during 1999 and 2000 the Seller paid the
premium for the MIG cover if the LTV ratio was between 75 per cent. and
90 per cent. Since 1 January 2001, the Seller has not required cover
under MIG policies for any Loans.
6. Status of Applicant(s)
The maximum amount of the aggregate Loan(s) under a mortgage account is
determined by the application of an affordability model. This model
delivers an individualised result that reflects the applicant's net
income, existing credit commitments and burden of family expenditure. The
model also calculates the full debt servicing cost at a stressed rate of
interest before comparing this cost to the net disposable income that the
applicant has available. The credit score also influences the decision of
how much to lend using the principle that high credit scores infer a
proven ability to manage financial affairs. The Seller maintains rules on
the amount of variable income (overtime, bonus, commission) that it will
allow into the model and as a general rule will allow no more than 60% of
these items. Benefit payments are allowed (including tax credits) as
these quite often compensate for the taxation and National Insurance
deductions that would normally cause lower levels of income to fall below
the minimum wage levels. This model returns "answers" of zero up to
amounts that would equate to over five times income. Regardless, the
Seller maintains a policy rule that it will not lend more than an amount
equal to five times income.
In cases where a single Borrower is attempting to have the Seller take a
secondary income into account, the Seller will consider the
sustainability of the Borrower's work hours, the similarity of the jobs
and/or skills, the commuting time and distance between the jobs, the
length of employment at both positions and whether the salary is
consistent with the type of employment. The Seller will determine, after
assessing the above factors, if it is appropriate to use both incomes. If
so, both incomes will be used as part of the normal income calculation.
39
When there are two applicants, the Seller adds joint incomes together for
the purpose of calculating the applicant's total income. The Seller may,
at its discretion, consider the income of one additional applicant as
well but only a maximum rate of one times that income.
Positive proof of the borrower's identity and address must be
established. In exceptional circumstances this requirement can be waived
(provided money laundering regulations are complied with), but the
reasons for doing so must be fully documented.
The Seller may exercise discretion within its lending criteria in
applying those factors which are used to determine the maximum amount of
the Loan(s). Accordingly, these parameters may vary for some Loans. The
Seller may take the following into account when exercising discretion:
credit score result, existing customer relationship, percentage of LTV,
stability of employment and career progression, availability of living
allowances and/or mortgage subsidy from the employer, employer's
standing, regularity of overtime, bonus or commission (up to a maximum of
60 per cent. of the income), credit commitments, quality of security
(such as type of property, repairs, location or saleability), and the
increase in income needed to support the Loan.
The Seller may not exercise discretion where it is lending over 95 per
cent. of value or the Borrower's credit score fails. There is an
exception from this policy for existing Borrowers who are moving home and
the Seller's overall position is improved.
7. Credit History
(a) Credit Search
A credit search is carried out in respect of all applicants. Applications
may be declined where an adverse credit history (for example, county
court judgment (or the Scottish equivalent), default, or bankruptcy
notice) is revealed or the score does not meet the required risk/reward
trade-off.
(b) Existing Lender's Reference
In some cases, the Seller may also seek a reference from any existing
and/or previous lender. Any reference must satisfy the Seller that the
account has been properly conducted and that no history of material
arrears exists.
(c) First Time Buyers/Applicants in rented accommodation
Where applicants currently reside in rented accommodation, the Seller may
seek a landlord's reference or sight of a bank statement or rent record
book. In addition, if considered appropriate, a further reference may be
taken in connection with any other property rented by the applicant(s)
within the preceding 18 months.
(d) Bank Reference
A bank reference may be sought or the applicants may be required to
provide bank statements in support of his or her application.
8. Scorecard
The Seller uses some of the above criteria and various other criteria to
provide an overall score for the application that reflects a statistical
analysis of the risk of advancing the Loan. The lending policies and
processes are determined centrally to ensure consistency in the
management and monitoring of credit risk exposure. Full use is made of
software technology in credit scoring new
40
applications. Credit scoring applies statistical analysis to publicly
available data and customer-provided data to assess the likelihood of an
account going into arrears.
The Seller reserves the right to decline an application that has received
a passing score. The Seller does have an appeals process if an applicant
believes his or her application to be unfairly denied. It is the Seller's
policy to allow only authorised individuals to exercise discretion in
granting variances from the scorecard.
41
SCHEDULE 5
POWER OF ATTORNEY IN FAVOUR OF FUNDING 1, FUNDING 2, THE MORTGAGES
TRUSTEE, THE FUNDING 1 SECURITY TRUSTEE
AND THE FUNDING 2 SECURITY TRUSTEE
THIS DEED OF POWER OF ATTORNEY is made on the 2006 by:
(1) HALIFAX PLC whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (registered number 02367076) (the SELLER);
IN FAVOUR OF each of:
(2) PERMANENT FUNDING (NO. 1) LIMITED whose registered office is at ▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (registered number 4267660) (FUNDING 1);
(3) PERMANENT FUNDING (NO. 2) LIMITED whose registered office is at ▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (registered number 04441772) (FUNDING 2);
(4) PERMANENT MORTGAGES TRUSTEE LIMITED whose registered office is at ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (registered number 83116) (the
MORTGAGES TRUSTEE);
(5) THE BANK OF NEW YORK, a New York banking corporation, acting through its
offices at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity
as security trustee under the Funding 1 Deed of Charge and the Funding 2
Deed of Charge (the FUNDING 1 SECURITY TRUSTEE and the FUNDING 2 SECURITY
TRUSTEE, which expressions shall include such companies and all other
persons or companies for the time being acting as the security trustee or
security trustees under the Funding 1 Deed of Charge and the Funding 2
Deed of Charge (as applicable)).
WHEREAS:
(A) By virtue of a mortgage sale agreement (the MORTGAGE SALE AGREEMENT)
dated 14 June 2002 and as subsequently amended and restated on 6 March
2003, 25 November 2003, 12 March 2004, 22 July 2004, 18 November 2004, 23
March 2005, 22 June 2005, 22 March 2006 and [*] 2006 and made between the
Seller (1) Funding 1 (2) Funding 2 (3) the Mortgages Trustee (4) the
Funding 1 Security Trustee and (5) the Funding 2 Security Trustee
provision was made for the execution by the Seller of this Power of
Attorney.
(B) Words and phrases in this Power of Attorney shall (save where expressed
to the contrary) have the same meanings respectively as the words and
phrases in the Master Definitions and Construction Schedule dated [*] as
amended, varied or supplemented from time to time and signed by amongst
others, the parties to the Power of Attorney.
NOW THIS DEED WITNESSETH as follows:
1. The Seller irrevocably and by way of security for the performance of the
covenants, conditions and undertakings on the part of the Seller
contained in the Mortgage Sale Agreement and the Servicing Agreement
HEREBY APPOINTS each of Funding 1, Funding 2, the Mortgages Trustee, the
Funding 1 Security Trustee and the Funding 2 Security Trustee and any
receiver and/or administrator appointed from time to time in respect of
Funding 1 and/or Funding 2 and/or the Mortgages Trustee or their assets
(each an ATTORNEY) severally to be its true and lawful attorney for the
Seller and in the Seller's name or otherwise to do any act matter or
thing which any Attorney considers necessary or desirable for the
protection, preservation or enjoyment of that Attorney's interest in the
Loans and
42
their Related Security and/or which ought to be done under the covenants,
undertakings and provisions contained in the Mortgage Sale Agreement
including (without limitation) any or all of the following:
(a) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) any conveyance, assignation or transfer
(including, for the avoidance of doubt each Scottish Declaration
of Trust) of the Loans or any of them to the Mortgages Trustee and
its successors in title or to any other person or persons entitled
to the benefit thereof;
(b) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) any conveyance, assignment, assignation
or transfer (including for the avoidance of doubt, each Scottish
Declaration of Trust) of the Related Security or any item
comprised therein (to the extent only that such item or items
relate to the Loans) to the Mortgages Trustee and its successors
in title or to any other person or persons entitled to the benefit
thereof or entitled to be registered at the Land Registry as
proprietor thereof or to be registered in the Land Register of
Scotland or recorded in the General Register of Sasines as
heritable creditor thereof (as the case may be);
(c) to do every other act or thing which the Seller is obliged to do
under the Mortgage Sale Agreement or which that Attorney may
otherwise consider to be necessary proper or expedient for fully
and effectually vesting or transferring the interests sold
thereunder in the Loans and their Related Security or any or each
of them and/or the Seller's estate right and title therein or
thereto in or to the Mortgages Trustee and its successors in title
or to any other person or persons entitled to the benefit thereof
(as the case may be) in the same manner and as fully and
effectually in all respects as the Seller could have done
including, without limitation, any of the acts referred to in
CLAUSE 6.5(A) to (C) of the Mortgage Sale Agreement;
(d) to exercise its rights, powers and discretions under the Loans
including the right to fix the rate or rates of interest payable
under the Loans in accordance with the terms thereof including,
for the avoidance of doubt, whilst such Loans subsist and subject
to the consent of the Mortgages Trustee being given to the setting
of such rates, setting the Seller's Variable Base Rate in the
circumstances referred to in CLAUSE 4.4 of the Servicing Agreement
and/or following perfection pursuant to CLAUSE 6.1 of the
Mortgages Sale Agreement PROVIDED THAT nothing in the Clause shall
prevent the Seller (or any of its attorneys from time to time)
from setting a higher rate than those set or to be set or required
or to be required by the Mortgages Trustee or Funding 1 or Funding
2 under this Power of Attorney;
(e) to discharge the Mortgages or any of them and to sign, seal,
deliver and execute such receipts, releases, surrenders,
instruments, discharges, retrocessions and deeds as may be
requisite or advisable in order to discharge the relevant Property
or Properties from the Mortgages or any of them; and
(f) to exercise all the powers of the Seller in relation to such Loans
and their Related Security.
2. Each Attorney shall have the power by writing under its hand by an
officer of the Attorney from time to time to appoint a substitute who
shall have power to act on behalf of the Seller as if that substitute
shall have been originally appointed Attorney by this Power of Attorney
(including, without limitation, the power of further substitution) and/or
to revoke any such appointment at any time without assigning any reason
therefor.
3. The Seller hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorneys shall lawfully do or cause
to be done in and concerning the Loans or their Related Security by
virtue of this Power of Attorney.
43
4. The laws of England shall apply to this Power of Attorney and the
interpretation thereof.
IN WITNESS WHEREOF the Seller has executed and delivered this document as a
deed the day and year first before written.
THE COMMON SEAL of )
HALIFAX PLC )
was hereunto affixed in )
the presence of: )
________________________ Authorised Signatory
________________________ Authorised Signatory
44
SCHEDULE 6
LOAN REPURCHASE NOTICE
Dated [ ]
1. It is hereby agreed that for the purpose of this notice the PRINCIPAL
AGREEMENT shall mean the Mortgage Sale Agreement dated 14 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004, 22
July 2004, 18 November 2004, 23 March 2005, 22 June 2005 and 22 March
2006 and as further amended and restated on [*] 2006 and from time to
time, made between (1) HALIFAX PLC (the SELLER) (2) PERMANENT FUNDING
(NO. 1) LIMITED (3) PERMANENT FUNDING (NO. 2) LIMITED (4) PERMANENT
MORTGAGES TRUSTEE LIMITED (the MORTGAGES TRUSTEE) and (5) THE BANK OF NEW
YORK (as the same may be or have been amended, varied or supplemented
from time to time with the consent of those parties).
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. In accordance with CLAUSE 8.5 of the Principal Agreement, upon receipt of
this Loan Repurchase Notice by the Seller there shall exist between the
Seller and the Mortgages Trustee an agreement (the AGREEMENT FOR SALE)
for the sale by the Mortgages Trustee to the Seller of the Loans and
their Related Security more particularly described in the Schedule
hereto. Completion of such sale shall take place on [ ].
4. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
provisions of the Principal Agreement.
______________________________
Signed for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED
[On duplicate
We hereby acknowledge receipt of and confirm the contents of the Loan
Repurchase Notice dated [ ].
______________________________
Signed for and on behalf of
HALIFAX PLC]
45
SCHEDULE
1 2 3 4 5
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
46
SCHEDULE 7
ASSIGNMENT OF THIRD PARTY RIGHTS
THIS DEED OF ASSIGNMENT is made on [*]
BY:
(1) HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the TRANSFEROR);
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited company incorporated under the laws of Jersey, Channel Islands,
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(the TRANSFEREE).
WHEREAS:
(A) By the charges by way of legal mortgage or standard security (the
MORTGAGES) brief particulars of which are set out in the Annexure hereto
the properties brief particulars of which are similarly set out became
security for the repayment of the moneys therein mentioned.
(B) By the Mortgage Sale Agreement, the Transferor agreed to sell and the
Transferee agreed to buy all right, title, interest and benefit (both
present and future) of the Transferor in and under those Mortgages and
all Related Security and all monies secured by those Mortgages and
Related Security.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals) shall,
except where the context otherwise requires and save where otherwise
defined in this Deed, have the meanings given to them in the master
definitions and construction schedule dated [*] as amended and/or
restated from time to time, signed by, amongst others, the parties to
this Deed (as the same may be amended, varied or supplemented from time
to time with the consent of the parties to this Deed) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) and this Deed shall be construed
in accordance with the interpretation provisions set out in CLAUSE 2
thereof.
2. The Transferor hereby assigns absolutely unto the Transferee with full
title guarantee or, in the case of any Related Security or causes of
action (as described in CLAUSE 2(B) below) governed by Scots law, with
absolute warrandice:
(a) the benefit of all Related Security relating to the Mortgages
(including without limitation all securities for the principal
moneys and interest secured by the Mortgages and the benefit of
all consents to mortgage signed by occupiers of the mortgaged
properties and MHA Documentation and the benefit of all
guarantees, indemnities and surety contracts relating to the
Mortgages) other than any such Related Security which has been
transferred to the Transferee by other means or which is not
otherwise capable of such transfer; and
(b) all causes and rights of action of the Transferor against any
person in connection with any report, valuation, opinion,
certificate, consent or other statement of fact or opinion given
in connection with any Related Security relating to the Mortgages
or affecting the decision to make any advance in connection with
such Mortgages.
47
3. The Transferor on behalf of the Transferee agrees to intimate the
assignation contained in CLAUSE 2 hereof to all relevant third parties
where required to do so pursuant to CLAUSE 6 of the Mortgage Sale
Agreement or as otherwise required by the Funding 1 Security Trustee or
the Funding 2 Security Trustee.
4. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED AS A DEED by )
HALIFAX PLC )
acting by its attorney in )
the presence of: ) ______________________
Witness's Signature: _____________________
Name: _____________________
Address: _____________________
48
ANNEXURE REFERRED TO IN THE FOREGOING ASSIGNMENT
Account No. Property address Borrower Date of Mortgage
49
SCHEDULE 8
ASSIGNMENT OF HALIFAX MORTGAGE RE LIMITED MIG POLICIES
THIS DEED is made on [*]
BY:
(1) HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the SELLER);
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited company incorporated under the laws of Jersey, Channel Islands,
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the MORTGAGES TRUSTEE).
WHEREAS:
(A) By a Mortgage Sale Agreement dated 14 June 2002, as amended and restated
on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004, 18
November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and as further
amended and restated on [*] 2006 and from time to time made between,
amongst others, the parties hereto, the Seller agreed to transfer to the
Mortgages Trustee certain charges by way of legal mortgage or standard
security secured on residential property in England, Wales and Scotland
together with the benefit of any monies secured thereby from time to
time.
(B) The Seller has the benefit of mortgage indemnity insurance policies brief
details of which are set out in the Schedule to this Deed (the HMRL MIG
POLICIES).
(C) The Seller has agreed with the Mortgages Trustee to assign to the
Mortgages Trustee the benefit of the HMRL MIG Policies to the extent that
they relate to the Loans in the Portfolio.
(D) The insurance businesses (including, for the avoidance of doubt, the HMRL
MIG Policies) of Halifax Mortgage Re Limited were acquired by HBOS
Insurance (PCC) Guernsey Limited on 21 December 2001.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals) shall,
except where the context otherwise requires and save where otherwise
defined in this Deed, have the meanings given to them in the master
definitions and construction schedule dated [*] as amended and/or
restated from time to time, signed by amongst others, the parties to this
Deed, (as the same may be amended, varied or supplemented from time to
time with the consent of the parties to this Deed) (the MASTER
DEFINITIONS CONSTRUCTION SCHEDULE) and this Deed shall be construed in
accordance with the interpretation provisions set out in CLAUSE 2
thereof.
2. The Seller with full title guarantee hereby conveys, transfers and
assigns to the Mortgages Trustee absolutely all its right, title,
interest and benefit in the HMRL MIG Policies to the extent that they
relate to the Mortgages which as at this date are comprised in the
Portfolio, and all moneys and
50
proceeds to become payable under any of the same and all covenants
relating thereto and all powers and remedies for enforcing the same.
3. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF which this document has been executed and delivered as a
deed the day and year first before written.
EXECUTED AS A DEED by )
HALIFAX PLC )
acting by its attorney in )
the presence of: ) ______________________
Witness's Signature: ______________________
Name: ______________________
Address: ______________________
51
SCHEDULE 1
[MORTGAGE INDEMNITY GUARANTEE POLICIES NUMBERED 227001, 227001(A),
227002, 227003 AND 227006
RESPECTIVELY ISSUED TO THE SELLER BY HALIFAX MORTGAGE RE LIMITED.]
52
SCHEDULE 2
1 2 3 4 5
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
53
SCHEDULE 9
HALIFAX MORTGAGE RE LIMITED MIG POLICIES ASSIGNMENT NOTICE
To: HBOS Insurance (PCC) Guernsey Ltd
c/o AON Insurance Managers (Guernsey) Limited
(as Managers of HBOS Insurance (PCC) Ltd)
▇▇ ▇▇▇ ▇▇
Maison Trinity
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
[*]
Dear Sirs,
RE: [ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED 227001,
227001(A), 227002, 227003 AND 227006 RESPECTIVELY (THE MIG POLICIES)]
We hereby give you notice that, by an Assignment dated [*] and made between
ourselves and Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE) (a
copy of which is attached to this notice), we assigned all of our right, title,
benefit and interest in the MIG Policies to the Mortgages Trustee (to the
extent that they relate to the loans and the mortgages in a portfolio referred
to in [the Mortgage Sale Agreement dated [*] as amended and/or restated from
time to time between ourselves, Permanent Funding (No. 1) Limited, Permanent
Funding (No. 2) Limited, the Mortgages Trustee and The Bank of New York/the New
Portfolio Notice dated [*] between ourselves, Permanent Funding (No.1) Limited,
Permanent Funding (No. 2) Limited and the Mortgages Trustee)] 1 .
Yours faithfully,
____________________________
For and on behalf of
HALIFAX PLC
Copy: Permanent Mortgages Trustee Limited
Permanent Funding (No. 1) Limited
Permanent Funding (No. 2) Limited
The Bank of New York
-----------------------
1 Delete as applicable.
54
SCHEDULE 10
INSURANCE ENDORSEMENT
ON THE HEADED NOTEPAPER OF [THE RELEVANT INSURER ]
ENDORSEMENT [X] attaching to, supplemental to and forming part of policy number
[policy number] (the POLICY) issued by [name of Insurer] (the INSURER).
Expressions defined in the Policy shall unless indicated otherwise, have the
same meanings in this endorsement.
It is hereby noted and agreed that with effect from the date of this
Endorsement:
1. The definition of INSURED shall be deleted in its entirety and replaced
with the following wording:
(a) "Halifax plc (HALIFAX) whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
(b) any assignee or person to whom Halifax has assigned (whether
legally or equitably and whether by way of security or otherwise)
or has declared a trust in respect of any loans and/or mortgages
and/or standard securities and related collateral and/or assets to
which this Policy relates (an ASSIGNEE) (whether or not any such
Assignee holds the same on trust for another or others); and
(c) any person benefiting from security granted by Halifax or its
Assignee over any loans and/or mortgages and/or standard
securities and related collateral and/or assets to which this
Policy relates in connection with the financing or re-financing of
such loans and/or mortgages and/or standard securities and related
collateral and/or assets."
2. Each term of the Policy which is inconsistent with the intent and/or
effect of the amended definition of INSURED contemplated in paragraph 1
ABOVE (the NEW DEFINITION) shall be subject to the New Definition and
shall not apply to the extent that such term of the Policy is
inconsistent with the New Definition.
3. This endorsement does not have, nor is intended by the parties to have,
the effect of conferring on the Insurer any greater liabilities under the
Policy than those of the Insurer immediately prior to this endorsement
being entered into between parties to this endorsement.
4. The Insurer acknowledges and agrees that any Insured under the Policy may
from time to time appoint Halifax or any other person as agent of that
Insured to deal with the Insurer on its behalf in the administration of
and making and payment of claims under the Policy.
All other terms, clause and conditions of the Policy remain unchanged.
55
This Endorsement is signed for and on behalf of the Insurer by a duly
authorised signatory:
______________________
[Name]
[Position]
[Insurer]
Dated 2006
56
SCHEDULE 11
INSURANCE ACKNOWLEDGEMENTS
PART 1
ON THE HEADED NOTEPAPER OF GE MORTGAGE INSURANCE LIMITED
To: Halifax plc (the SELLER)
▇▇/▇/▇/▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Channel Islands
Permanent Funding (No. 1) Limited (FUNDING 1)
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇'▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Permanent Funding (No. 2) Limited (FUNDING 2)
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇'▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
The Bank of New York (the FUNDING 1 SECURITY TRUSTEE and the FUNDING 2
SECURITY TRUSTEE)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
[date]
Dear Sirs,
[MORTGAGE INDEMNITY GUARANTY POLICIES NUMBERS 227001, 227001(A), 227002, 227003
AND 227006 (THE MIG POLICIES)]
We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:
(a) the Seller may assign or agree to transfer or declare a trust in
respect of its interest in properties which are (or may from time
to time be) covered by the MIG Policies to the Mortgages Trustee;
(b) the Mortgages Trustee may declare a trust over its interest in
such properties in favour of Funding 1, Funding 2 and the Seller;
and
57
(c) Funding 1 and Funding 2 may charge their respective interests in
such properties to the Funding 1 Security Trustee (in the case of
Funding 1) and the Funding 2 Security Trustee (in the case of
Funding 2).
In consideration of the payment of [POUND]1 made by each of the Seller, the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (receipt whereof is hereby acknowledged), we hereby
confirm that the arrangements set out in paragraphs (a) to (c) inclusive above
will not cause the MIG Policies to lapse or terminate and, notwithstanding any
such arrangements, we will continue to pay claims under the MIG Policies in the
same way and in the same amount as we would have paid them, had the said
arrangements not been entered into.
Yours faithfully,
FOR AND ON BEHALF OF GE MORTGAGE INSURANCE LIMITED
58
PART 2
ON THE HEADED NOTEPAPER OF HBOS INSURANCE (PCC) GUERNSEY LTD
To: Halifax plc (the SELLER)
▇▇/▇/▇/▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Channel Islands
Permanent Funding (No. 1) Limited (FUNDING 1)
▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Permanent Funding (No. 2) Limited (FUNDING 2)
▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇'▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
The Bank of New York (the FUNDING 1 SECURITY TRUSTEE and the FUNDING 2
SECURITY TRUSTEE)
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
[*] 2006
Dear Sirs,
[MORTGAGE INDEMNITY GUARANTEE POLICY NUMBERS 227001, 227001(A), 227002, 227003
AND 227006 (THE "MIG POLICIES")]
We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:
(a) all of the Seller's right, title, benefit and interest in the MIG
Policies (to the extent that the same relate to the mortgage loans and
their collateral security sold or to be sold by the Seller to the
Mortgages Trustee pursuant to a mortgage sale agreement to be entered
into between each of the parties to whom this letter is addressed) shall
be assigned by the Seller to the Mortgages Trustee;
59
(b) the Seller may sell and assign or agree to sell and assign or declare a
trust in respect of its interest in properties which are (or may from
time to time be) covered by the MIG Policies to or in favour of the
Mortgages Trustee;
(c) the Mortgages Trustee may declare a trust over its interest in such
properties in favour of Funding 1, Funding 2 and the Seller; and
(d) Funding 1 and/or Funding 2 may charge their respective beneficial
interests in such properties to the Funding 1 Security Trustee (in the
case of Funding 1) and the Funding 2 Security Trustee (in the case of
Funding 2).
In consideration of the payment of [POUND]1 made by each of the Seller, the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (receipt whereof is hereby acknowledged), we hereby
confirm that the arrangements set out in paragraphs (a) to (d) inclusive above
will not cause the MIG Policies to lapse or terminate and, notwithstanding any
such arrangements, we will continue to pay claims under the MIG Policies in the
same way and in the same amount as we would have paid them, had the said
arrangements not been entered into.
Yours faithfully,
FOR AND ON BEHALF OF HBOS INSURANCE (PCC) GUERNSEY LIMITED
60
SCHEDULE 12
NEW PORTFOLIO NOTICE
Dated [ ]
1. It is hereby agreed for the purpose of this notice the PRINCIPAL
AGREEMENT shall mean the Mortgage Sale Agreement dated 14 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004, 22
July 2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006
and as further amended and restated on [*] 2006 made between (1) HALIFAX
PLC (the SELLER) (2) PERMANENT FUNDING (NO. 1) LIMITED (FUNDING 1) (3)
PERMANENT FUNDING (NO. 2) LIMITED (FUNDING 2) (4) PERMANENT MORTGAGES
TRUSTEE LIMITED (the MORTGAGES TRUSTEE) and (5) THE BANK OF NEW YORK (as
the same may be or have been amended, varied or supplemented from time to
time with the consent of those parties).
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. In accordance with and subject to CLAUSE 4.1 of the Principal Agreement,
upon receipt by the Seller of the duplicate of this notice signed by
Funding 1, Funding 2 and the Mortgages Trustee, there shall exist between
the Seller, Funding 1, Funding 2 and the Mortgages Trustee an agreement
(the AGREEMENT FOR SALE) for the sale by the Seller to the Mortgages
Trustee of the New Loans and their Related Security more particularly
described in the Schedule hereto (other than any New Loans and their
Related Security which have been redeemed in full prior to the next
following Sale Date). Completion of such sale shall take place on [ ].
4. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
provisions of the Principal Agreement.
_________________________________
Signed for and on behalf of
HALIFAX PLC
[On duplicate:
We hereby acknowledge receipt of the New Portfolio Notice dated [ ], and
confirm that we are prepared to purchase New Loans as set out in that notice.
_________________________________
Signed for and on behalf of
PERMANENT FUNDING (NO. 1) LIMITED
61
_________________________________
Signed for and on behalf of
PERMANENT FUNDING (NO. 2) LIMITED
_________________________________
Signed for and on behalf of
[PERMANENT MORTGAGES TRUSTEE LIMITED]
62
SCHEDULE
1. 2. 3. 4. 5.
Title No. (if Borrower Property Postcode Account No. Date of Mortgage
registered)
63
SCHEDULE 13
FORMS OF SCOTTISH TRANSFER
LAND REGISTER
We, HALIFAX PLC, incorporated under the Companies Acts (registered number
02367076) and having our Registered Office at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the TRANSFEROR) CONSIDERING THAT in terms of a Mortgage Sale
Agreement among us the Transferor, PERMANENT MORTGAGES TRUSTEE LIMITED, a
private limited company incorporated under the laws of Jersey, Channel Islands
(registered number 83116) and having its registered office at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the TRANSFEREE) and others dated 14 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July
2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and as
further amended and restated on [*] 2006 (the MORTGAGE SALE AGREEMENT) we have
sold our whole right, title and interest in and to the Standard Securities and
others hereinafter mentioned to the Transferee NOW THEREFORE we, the
Transferor, IN CONSIDERATION of the sums payable in terms of and in implement
of the Mortgage Sale Agreement HEREBY ASSIGN to the Transferee as trustee under
and in terms of the Mortgages Trust Deed among us, the Transferor, the
Transferee and others dated 13 June 2002 as amended and restated on 6 March
2003, 25 November 2003, 12 March 2004, 22 July 2004, 18 November 2004, 23 March
2005, 22 March 2006 and [*] 2006 (the MORTGAGES TRUST DEED) and its successor
or successors as trustee or trustees under and in terms of the Mortgages Trust
Deed:
(a) the Standard Securities granted by the respective parties whose names are
specified in Column 3 of the Schedule annexed and executed as relative
hereto in favour of us the Transferor for all sums due and to become due,
to the extent of the sums specified in the relative entry in Column 6 of
the said Schedule being the amounts now due under the said respective
Standard Securities, registered said Standard Securities in the Land
Register under the Title Number specified in the relative entry in Column
4 of the said Schedule on the date specified in the relative entry in
Column 5 of the said Schedule; and
(b) the whole rights, title and interest of us the Transferor in and under
all and any personal bonds, credit agreements or agreements for loan
(however constituted) secured by the said Standard Securities and granted
by or entered into with the said respective parties whose names are
specified in Column 3 of the said Schedule, the dates of the respective
personal bonds, credit agreements or agreements for loan being specified
in the relative entry in Column 7 of the said Schedule;
With interest from and also arrears and accumulations of interest due and
unpaid as at [ ]; And we grant warrandice:
IN WITNESS WHEREOF these presents typewritten on this [and the preceding] page
are together with the Schedule annexed hereto executed at [ ] on the
[ ] day of [ ] as follows:
SUBSCRIBED for and on behalf of HALIFAX PLC by
_______________________ _______________________ Authorised Signatory
(Print Full Name)
before this witness
_______________________ Witness
64
_______________________
(Print Full Name)
_______________________
_______________________
(Address)
65
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY HALIFAX PLC IN
FAVOUR OF PERMANENT MORTGAGES TRUSTEE LIMITED
1. 2. 3. 4. 5. 6. 7.
Account No. Address Borrowers Title Registration Sum Due Date of
Full Names Number Date Bond or Loan
Agreement
_______________________ Authorised Signatory
66
SCHEDULE 14
FORMS OF SCOTTISH TRANSFER
SASINE REGISTER
We, HALIFAX PLC, incorporated under the Companies Acts (registered number
02367076) and having our Registered Office at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the TRANSFEROR) CONSIDERING THAT in terms of a Mortgage Sale
Agreement among us the Transferor, PERMANENT MORTGAGES TRUSTEE LIMITED, a
private limited company incorporated under the laws of Jersey, Channel Islands
(registered number 83116) and having its registered office at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the TRANSFEREE) and others dated 14 June 2002 as
amended and restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July
2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and as
further amended and restated on [*] 2006 (the MORTGAGE SALE AGREEMENT) we have
sold our whole right, title and interest in and to the Standard Securities and
others hereinafter mentioned to the Transferee NOW THEREFORE we the Transferor
IN CONSIDERATION of the sums payable in terms of and in implement of the
Mortgage Sale Agreement HEREBY ASSIGN to the Transferee as trustee under and in
terms of the Mortgages Trust Deed among us, the Transferor, the Transferee and
others dated 13 June 2002 as amended and restated on 6 March 2003, 25 November
2003, 12 March 2004, 22 July 2004, 18 November 2004, 23 March 2005, 22 March
2006 and [*] 2006 (the MORTGAGES TRUST DEED) and its successor or successors as
trustee or trustees under and in terms of the Mortgages Trust Deed:
(a) the Standard Securities granted by the respective parties whose names are
specified in Column 3 of the Schedule annexed and executed as relative
hereto in favour of us the Transferor for all sums due and to become due,
to the extent of the sums specified in the relative entry in Column 6 of
the said Schedule being the amounts now due under the said respective
Standard Securities, recorded said Standard Securities in the Register
for the County specified in the relative entry in Column 4 of the said
Schedule on the date specified in the relative entry in Column 5 of the
said Schedule; and
(b) the whole rights, title and interest of us the Transferor in and under
all and any personal bonds, credit agreements or agreements for loan
(however constituted) secured by the said Standard Securities and granted
by or entered into with the said respective parties whose names are
specified in Column 3 of the said Schedule, the dates of the respective
personal bonds, credit agreements or agreements for loan being specified
in the relative entry in Column 7 of the said Schedule;
With interest from and also arrears and accumulations of interest due and
unpaid as at [ ]; And we grant warrandice:
IN WITNESS WHEREOF these presents typewritten on this [and the preceding] page
are together with the Schedule annexed hereto executed at [ ] on the
[ ] day of [ ] as follows:
SUBSCRIBED for and on behalf of HALIFAX PLC by
_______________________ _______________________ Authorised Signatory
(Print Full Name)
before this witness
_______________________ Witness
67
_______________________
(Print Full Name)
_______________________
_______________________
(Address)
68
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY HALIFAX PLC IN
FAVOUR OF PERMANENT MORTGAGES TRUSTEE LIMITED
1. 2. 3. 4. 5. 6. 7.
Account No. Address Borrowers Title Registration Sum Due Date of
Full Names Number Date Bond or Loan
Agreement
_______________________ Authorised Signatory
69
SCHEDULE 15
FORM OF SCOTTISH DECLARATION OF TRUST
DECLARATION OF TRUST
among
HALIFAX PLC, incorporated under the Companies Acts (registered number 02367076)
and having its Registered Office at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ (the SELLER);
and
PERMANENT MORTGAGES TRUSTEE LIMITED, a private limited company incorporated
under the laws of Jersey, Channel Islands (registered number 83116), and having
its registered office at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel
Islands as trustee under and in terms of the mortgages trust deed
aftermentioned (the MORTGAGES TRUSTEE);
and
PERMANENT FUNDING (NO. 1) LIMITED, incorporated under the Companies Acts
(registered number 4267660) and having its registered office at ▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (FUNDING 1);
and
PERMANENT FUNDING (NO. 2) LIMITED, incorporated under the Companies Acts
(registered number 04441772) and having its registered office at ▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇'▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (FUNDING 2).
WHEREAS:
(A) Title to the Scottish Trust Property aftermentioned is held by and vested
in the Seller.
(B) In terms of a Mortgages Trust Deed entered into among the Seller, Funding
1, Funding 2 and the Mortgages Trustee dated 13 June 2002 as amended and
restated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004,
18 November 2004, 23 March 2005, 22 March 2006 and [*] 2006 and the
Mortgages Trust constituted in terms thereof, the Mortgages Trustee holds
the Trust Property on trust for the Beneficiaries therein specified.
(C) In terms of a Mortgage Sale Agreement entered into among, inter alios,
the Seller, Funding 1, Funding 2 and the Mortgages Trustee dated 14 June
2002, as amended on 6 March 2003, 25 November 2003, 12 March 2004, 22
July 2004, 18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006
and as amended and restated on [*] 2006 (the MORTGAGE SALE AGREEMENT) the
Seller has agreed to sell inter alia the said Scottish Trust Property to
the Mortgages Trustee to be held thereafter by the Mortgages Trustee
under and in terms of the Mortgages Trust.
(D) In implement of CLAUSE 4.5(A)(VII) of the Mortgage Sale Agreement and
pending the taking of legal title to the said Scottish Trust Property by
the Mortgages Trustee, the Seller has undertaken to grant this deed.
NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:
1. INTERPRETATION
In this deed:
70
(a) the amended and restated master definitions and construction
schedule signed by, amongst others, the parties to this deed and
dated [*] (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this deed) (the
MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
specifically incorporated into this deed and, accordingly, the
expressions defined in the Master Definitions and Construction
Schedule (as so amended, varied or supplemented from time to time)
shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this deed,
including the Recitals and this deed shall be construed in
accordance with the interpretation provisions set out in CLAUSE 2
of the Master Definitions and Construction Schedule; and
(b) SCOTTISH TRUST PROPERTY shall mean the Scottish Loans and their
Related Security brief particulars of which are detailed in the
schedule annexed and executed as relative hereto (the SCHEDULE)
and any Further Advances and Home Cash Reserve Advances made in
respect of such Scottish Loans, and all right, title, interest and
benefit of the Seller to:
(i) all payments of principal and interest (including, for the
avoidance of doubt, all Accrued Interest, Arrears of
Interest, Capitalised Expenses and Capitalised Arrears) and
other sums due or to become due in respect of such Scottish
Loans and their Related Security including, without
limitation, the right to demand, ▇▇▇ for, recover and give
receipts for all principal monies, interest and costs and
the right to ▇▇▇ on all covenants and undertakings made or
expressed to be made in favour of the Seller under the
applicable Mortgage Terms;
(ii) subject where applicable to the subsisting rights of
redemption of Borrowers, all MHA Documentation, Deeds of
Postponement, all third party guarantees and any other
collateral security for the repayment of the relevant
Scottish Loans;
(iii) the right to exercise all the powers of the Seller in
relation thereto;
(iv) all proceeds resulting from the enforcement of any of those
Scottish Loans and their Related Security;
(v) each Certificate of Title and Valuation Report relevant to
those Scottish Loans and any right of action of the Seller
against any solicitor, qualified conveyancer, valuer or
other person in connection with any report, valuation,
opinion, certificate or other statement of fact or opinion
given in connection with any of those Scottish Loans and
their Related Security, or any part thereof or affecting
the decision of the Seller to make or offer to make any of
those Scottish Loans or part thereof;
(vi) the proceeds of all claims made by or on behalf of the
Seller or to which the Seller is entitled in relation to
the Scottish Properties secured by the Scottish Mortgages
detailed in the Schedule under the Buildings Policies and
the Properties in Possession Cover; and
(vii) the MIG Policies, so far as they relate to the relevant
Scottish Loans and their Related Security, including the
right to receive the proceeds of any claims.
2. DECLARATION OF TRUST
The Seller hereby DECLARES that from and after the date hereof the Seller
holds and, subject to CLAUSE 8 below, shall henceforth hold the Scottish
Trust Property and its whole right, title and interest, present and
future, therein and thereto in trust absolutely for the Mortgages Trustee
and its assignees (whether absolutely or in security) whomsoever.
71
3. INTIMATION
The Seller hereby intimates to the Mortgages Trustee the coming into
effect of the trust hereby declared and created and the Mortgages Trustee
by its execution of this deed immediately subsequent to the execution
hereof by the Seller acknowledges such intimation.
4. DEALINGS WITH SCOTTISH TRUST PROPERTY AND NEGATIVE PLEDGE
The Seller warrants and undertakes that:
(a) as at the date hereof it holds, subject to any pending
registration or recording in the Land Register of Scotland or the
General Register of Sasines, legal title to the Scottish Trust
Property unencumbered by any fixed or floating charge, diligence
or other Security Interest;
(b) it shall not create or agree to create any fixed or floating
charge or other Security Interest over or which may attach to or
affect the whole or any part of the Scottish Trust Property or
otherwise dispose of the same at any time when such Scottish Trust
Property or part thereof remains subject to the trust hereby
created; and
(c) it shall deal with the Scottish Trust Property (including without
prejudice to said generality the calculation and setting of any
interest rate applicable thereto) in accordance with the
provisions of the Transaction Documents and the specific written
instructions (if any) of the Mortgages Trustee or its foresaids
and shall take, subject to CLAUSE 8 below, any such action as may
be necessary (including for the avoidance of doubt the raising or
defending of any proceedings in any court of law whether in
Scotland or elsewhere) to secure or protect the title to the
Scottish Trust Property but only in accordance with the specific
written instructions (if any) of the Mortgages Trustee or its
foresaids.
5. TRANSFER OF TITLE
5.1 The Mortgages Trustee and its foresaids as beneficiary hereunder shall
have the right to call upon the Seller to execute and deliver to the
Mortgages Trustee, subject to the terms of CLAUSE 6 of the Mortgage Sale
Agreement, valid assignations of the Scottish Trust Property or any part
thereof, and that notwithstanding the winding up of the Seller, the
making of any administration order or the filing of documents with the
court for the appointment of an administrator or the service of a notice
of intention to appoint an administrator in respect of the Seller or the
appointment of a receiver to all or any part of the Scottish Trust
Property.
5.2 The Seller undertakes to the Mortgages Trustee and binds and obliges
itself that, upon the occurrence of any one of the events specified in
CLAUSE 6.1 of the Mortgage Sale Agreement, it will within five London
Business Days of such occurrence provide such information as is necessary
to enable the Mortgages Trustee to complete Scottish Transfers (including
all schedules and annexures thereto) in relation to the whole of the
Scottish Trust Property.
5.3 For further assuring the said rights and powers specified in this CLAUSE
5, the Seller has granted a power of attorney in favour of the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee substantially in the form set out in SCHEDULE
5 to the Mortgage Sale Agreement.
6. MORTGAGES TRUSTEE DECLARATION OF TRUST
The Mortgages Trustee by its said execution of this deed hereby DECLARES
that its whole right, title and beneficial interest in and to the
Scottish Trust Property in terms of this deed are and shall be held (to
the extent not already so held) by the Mortgages Trustee and its
foresaids under and in terms
72
of the Mortgages Trust and all sums and amounts received or held by the
Mortgages Trustee relating thereto or deriving therefrom have been and
shall be added (to the extent aforesaid) to the Trust Property and held
by the Mortgages Trustee under the Mortgages Trust Deed.
7. MORTGAGES TRUST INTIMATION
The Mortgages Trustee hereby intimates to Funding 1, Funding 2 and the
Seller, as Beneficiaries of the Mortgages Trust, the declaration of trust
made in terms of CLAUSE 6 ABOVE and Funding 1, Funding 2 and the Seller
by executing this deed acknowledge such intimation.
8. TERMINATION OF TRUST
If:
(a) legal title to any part or parts of the Scottish Trust Property is
taken by the Mortgages Trustee or its foresaids in accordance with
the provisions of CLAUSE 5 ABOVE (which in the case of any
Scottish Mortgage shall be constituted by the registration or
recording of the title thereto in the Land Register of Scotland or
the General Register of Sasines (as appropriate)); or
(b) any part or parts of the Scottish Trust Property forms the subject
of a repurchase in accordance with the terms of CLAUSE 8.5 of the
Mortgage Sale Agreement,
the trust hereby declared and created pursuant to CLAUSES 2 and 3 ABOVE
shall (but only when any of the events or transactions before stated has
been completed irrevocably, validly and in full) ipso facto fall and
cease to be of effect in respect of such part or parts of the Scottish
Trust Property but shall continue in full force and effect in respect of
the whole remainder (if any) of the Scottish Trust Property.
9. CHANGE OF TRUSTEE
Except with the prior consent of the Mortgages Trustee and (for so long
as each retains any right or interest in the Scottish Trust Property)
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee, the Seller shall not be entitled to resign office as a
trustee or assume a new trustee or trustees under this deed.
10. VARIATION
This deed and the trusts hereby declared and created pursuant to CLAUSES
2 and 3 and CLAUSES 6 and 7 ABOVE shall not be varied in any respect
without the consent in writing of the Mortgages Trustee and (for so long
as each retains any right or interest in the Scottish Trust Property)
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee.
11. GOVERNING LAW
This deed shall be governed by and construed in accordance with the law
of Scotland and each of the parties hereby prorogates the non-exclusive
jurisdiction of the Scottish courts so far as not already subject thereto
and waives any right or plea of forum non conveniens in respect of such
jurisdiction.
12. REGISTRATION
The parties hereto consent to the registration of these presents for
preservation:
73
IN WITNESS WHEREOF these presents typewritten on this and the preceding [ ]
pages together with the Schedule annexed hereto are executed for and on behalf
of the Seller, the Mortgages Trustee, Funding 1 and Funding 2 at [ ] on
[ ] as follows:
SUBSCRIBED for and on behalf of
HALIFAX PLC by [ ], its
Attorney, at London on [ ] 2006 before this
witness:
..........................Witness .........................Attorney
(Signature) (Signature)
..........................
(Print Full Name)
..........................
(Address)
74
SUBSCRIBED for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED by [ ],
one of its Directors, at London on [ ] 2006
before this witness:
..........................Witness .........................Director
(Signature) (Signature)
..........................
(Print Full Name)
..........................
(Address)
SUBSCRIBED for an on behalf of
PERMANENT FUNDING (NO. 1) LIMITED by [ ], one
of its Directors, at London on [ ] 2006 before
this witness:
..........................Witness .........................Director
(Signature) (Signature)
..........................
(Print Full Name)
..........................
(Address)
SUBSCRIBED for an on behalf of
PERMANENT FUNDING (NO. 2) LIMITED by [ ], one
of its Directors, at London on [ ] 2006 before
this witness:
..........................Witness .........................Director
(Signature) (Signature)
..........................
(Print Full Name)
..........................
(Address)
75
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING DECLARATION OF TRUST
AMONG HALIFAX PLC, PERMANENT MORTGAGES TRUSTEE LIMITED, PERMANENT
FUNDING (NO. 1) LIMITED AND PERMANENT FUNDING (NO. 2) LIMITED
DETAILS OF SCOTTISH LOANS AND RELATED SECURITY
1. 2. 3. 4. 5. 6. 7.
Account Address Borrowers' Title Registration/ Sum Due Date of Loan
No. full names Number/ Recording Date Agreement
County
______________________________________________________ Attorney
Halifax plc
______________________________________________________ Director
Permanent Mortgages Trustee Limited
______________________________________________________ Director
Permanent Funding (No.1) Limited
______________________________________________________ Director
Permanent Funding (No.2) Limited
76
SCHEDULE 16
FORM OF MEMORANDUM OF RELEASE
Permanent Mortgages Trustee Limited
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Channel Islands
[*]
Halifax Plc
▇▇/▇/▇/▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attn: Head of Mortgage Securitisation
Dear Sirs,
Pursuant to CLAUSE 8.6 of the Mortgage Sale Agreement, we hereby acknowledge:
(a) that the loans detailed in the Annexure to the attached Assignment of
Third Party Rights are released from the security created by the Funding
1 Deed of Charge, the Second Supplemental Funding 1 Deed of Charge [list
any other supplement to the Funding 1 Deed of Charge], the Funding 2 Deed
of Charge [and list any other supplement to the Funding 2 Deed of
Charge]; and
(b) that all further monies due and received on the loans are now for the
account of Halifax.
Terms used (but not defined) herein shall have the meanings given to them in
the Master Definitions and Construction Schedule dated [*] signed by, amongst
others, Permanent Mortgages Trustee Limited and Halifax plc.
Yours faithfully
.....................................
For and on behalf of
PERMANENT MORTGAGES TRUSTEES LIMITED
77
SCHEDULE 17
RE-ASSIGNMENT OF MIG POLICIES
THIS DEED is made on [*]
BY:
1. PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited company incorporated under the laws of Jersey, Channel Islands,
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the MORTGAGES TRUSTEE);
IN FAVOUR OF:
2. HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the SELLER).
WHEREAS:
(A) By the Mortgage Sale Agreement dated 14 June 2002, as amended and
re-stated on 6 March 2003, 25 November 2003, 12 March 2004, 22 July 2004,
18 November 2004, 23 March 2005, 22 June 2005, 22 March 2006 and, as
further amended and restated on [*] 2006 made between, amongst others,
the parties hereto, the Seller agreed to transfer to the Mortgages
Trustee certain charges by way of legal mortgage or standard security
secured on residential property in England, Wales and Scotland together
with the benefit of any monies secured thereby.
(B) By the Mortgage Sale Agreement, the Mortgages Trustee has agreed to
re-transfer to the Seller the Mortgages listed in SCHEDULE 2 to this Deed
and to re-assign to the Seller the benefit of the mortgage indemnity
insurance policies brief details of which are set out in SCHEDULE 1 to
this Deed (the HMRL MIG POLICIES) to the extent that they relate to the
Mortgages listed in SCHEDULE 2 to this Deed.
(C) The insurance businesses (including, for the avoidance of doubt, the HMRL
MIG Policies) of Halifax Mortgage Re Limited were acquired by HBOS
Insurance (PCC) Guernsey Limited on 21 December 2001.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals) shall,
except where the context otherwise requires and save where otherwise
defined in this Deed, have the meanings given to them in the amended and
restated master definitions and construction schedule dated [*], signed
by amongst others, the parties to this Deed, (as the same may be amended,
varied or supplemented from time to time with the consent of the parties
to this Deed) (the MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) and this
Deed shall be construed in accordance with the interpretation provisions
set out in CLAUSE 2 thereof.
2. The Mortgages Trustee with full title guarantee hereby conveys, transfers
and assigns to the Seller absolutely all its right, title, interest and
benefit in the HMRL MIG Policies to the extent that they relate to the
Mortgages which are listed in SCHEDULE 2 to this Deed, and all moneys and
proceeds to become payable under any of the same and all covenants
relating thereto and all powers and remedies for enforcing the same.
78
3. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF which this document has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED acting by )
its attorney in the presence of: )
Witness:
Name:
Address:
79
SCHEDULE 1
[Mortgage indemnity guarantee policies numbered 227001, 227001(A), 227002,
227003 and 227006 respectively issued to the Seller by Halifax Mortgage Re
Limited.]
80
SCHEDULE 2
1. 2. 3. 4. 5.
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
81
SCHEDULE 18
HALIFAX MORTGAGE RE LIMITED MIG POLICIES RE-ASSIGNMENT NOTICE
To: HBOS Insurance (PCC) Guernsey Ltd
c/o AON Insurance Managers (Guernsey) Limited
(as Managers of HBOS Insurance (PCC) Ltd)
▇▇ ▇▇▇ ▇▇
Maison Trinity
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
[*]
Dear Sirs,
RE: [ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED 227001,
227001(A), 227002, 227003 AND 227006 RESPECTIVELY (THE MIG POLICIES)]
We hereby give you notice that, by an Assignment dated [*] and made between
ourselves and Halifax plc (the ASSIGNMENT), a copy of which is attached to this
notice, we assigned all of our right, title, benefit and interest in the MIG
Policies to Halifax plc (to the extent that they relate to the loans and the
mortgages listed in SCHEDULE 2 to the Assignment).
Yours faithfully,
.............................
For and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED
Copy: Halifax plc
Permanent Funding (No. 1) Limited
Permanent Funding (No. 2) Limited
The Bank of New York
82
SCHEDULE 19
RE-ASSIGNMENT OF THIRD PARTY RIGHTS
THIS DEED OF ASSIGNMENT is made on [*]
BY:
1. PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
limited company incorporated under the laws of Jersey, Channel Islands,
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(the TRANSFEROR);
IN FAVOUR OF:
2. HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales, whose registered office
is at ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the TRANSFEREE).
WHEREAS:
(A) By the charges by way of legal mortgage or standard security (the
MORTGAGES) brief particulars of which are set out in the Annexure hereto
the properties brief particulars of which are similarly set out became
security for the repayment of the moneys therein mentioned.
(B) By the Mortgage Sale Agreement, the Transferee sold and the Transferor
purchased all right, title, interest and benefit of the Transferee in and
under the Mortgages and all Related Security and all monies secured by
those Mortgages on or about [*].
(C) By CLAUSE 8.5 of the Mortgage Sale Agreement, the Transferor has now
agreed to sell and the Transferee has agreed to repurchase all right,
title, interest and benefit (both present and future) of the Transferor
in and under the Mortgages and all Related Security and all monies
secured by those Mortgages and Related Security.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals) shall,
except where the context otherwise requires and save where otherwise
defined in this Deed, have the meanings given to them in the amended and
restated master definitions and construction schedule dated [*] signed
by, amongst others, the parties to this Deed (as the same may be amended,
varied or supplemented from time to time with the consent of the parties
to this Deed) (the MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) and this
Deed shall be construed in accordance with the interpretation provisions
set out in CLAUSE 2 thereof.
2. The Transferor hereby assigns absolutely unto the Transferee with full
title guarantee or, in the case of any Related Security or causes of
action (as described in CLAUSE 2(B) below) governed by Scots Law, with
absolute warrandice:
(a) the benefit of all Related Security relating to the Mortgages
(including without limitation all securities for the principal
moneys and interest secured by the Mortgages and the benefit of
all consents to mortgage signed by occupiers of the mortgaged
properties and MHA Documentation and the benefit of all
guarantees, indemnities and surety contracts relating to the
Mortgages) other than any such Related Security which has been
transferred to the Transferee by other means or which is not
otherwise capable of such transfer; and
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(b) all causes of action of the Transferor against any person in
connection with any report, valuation, opinion, certificate,
consent or other statement of fact or opinion given in connection
with any Related Security relating to the Mortgages or affecting
the decision to make any advance in connection with such
Mortgages.
3. This Deed shall be governed by and construed in accordance with English
law (provided that any terms of the Deed which are particular to Scots
law shall be construed in accordance with the laws of Scotland).
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED )
acting by its attorney in )
the presence of: )
Witness's signature:
Name:
Address:
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ANNEXURE REFERRED TO IN THE FOREGOING ASSIGNMENT
Account No. Property Address Borrower Date of Mortgage
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APPENDIX 1
PART 1
INITIAL PORTFOLIO
PART 2
STANDARD DOCUMENTATION
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APPENDIX 2
PART 1
INITIAL PORTFOLIO
This is Part 1 (on accompanying CD-ROM) of the Exhibit to a Mortgage Sale
Agreement dated 14 June 2002 made between Halifax plc (1) Permanent Funding
(No. 1) Limited (2) Permanent Mortgages Trustee Limited (3) and State Street
Bank and Trust Company (4).
▇▇▇ ▇ ▇▇▇▇▇▇▇
HALIFAX PLC
▇▇▇▇▇ ▇▇▇▇▇
PERMANENT FUNDING (NO. 1) LIMITED
▇▇▇▇▇ ▇▇▇▇▇
PERMANENT MORTGAGES TRUSTEE LIMITED
▇▇▇▇▇ ▇▇▇▇▇▇
STATE STREET BANK AND TRUST COMPANY
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PART 2
STANDARD DOCUMENTATION
This is Part 2 of the Exhibit to a Mortgage Sale Agreement dated 14 June 2002
made between Halifax plc (1) Permanent Funding (No. 1) Limited (2) Permanent
Mortgages Trustee Limited (3) and State Street Bank and Trust Company (4).
▇▇▇ ▇ ▇▇▇▇▇▇▇
HALIFAX PLC
▇▇▇▇▇ ▇▇▇▇▇
PERMANENT FUNDING (NO. 1) LIMITED
▇▇▇▇▇ ▇▇▇▇▇
PERMANENT MORTGAGES TRUSTEE LIMITED
▇▇▇▇▇ ▇▇▇▇▇▇
STATE STREET BANK AND TRUST COMPANY
88